Sounds like you're stuck between a rock and a hard place. If you break up with him, you're going to be upset for a while. If you stay with him, you're basically telling yourself, him and everyone you know that you're not worthy of being treated with respect. Your friends have good reason to hate him – he sounds like a complete and utter douche bag. Don't get me wrong, I can imagine exactly why you like him: He's good looking, funny, he keeps you on your toes, it's exciting, you never know what to expect, it's dramatic, passionate and nobody knows what it's like when it's just you and him.
But here's the thing. He cheated on you. He went out and made the conscious decision to have sex with another girl who wasn't you. You forgave him and took him back. Then he did it again. You know why? Because you showed him that it was acceptable for him to have sex with another girl. Why wouldn't he do it again when there were no consequences the first time. Now he's telling you he wants to go on a break so he can hook up with other girls without having to feel guilty about it. Rest assured he'll end up getting back together with you once the grass stops looking greener or he misses the way you used to put up with his crap.
Do you not see a problem with this picture?
Nobody is ever going to treat you better than you treat yourself, and right now you're treating yourself like someone who will happily be walked all over.
Like my Dad always says, "When someone shows you who they are, believe them." This guy has shown you time and time again that he doesn't have respect for you or your relationship, and you don't even seem to be contemplating breaking up with him. That is not okay.
My advice, for what it's worth, is to listen to your friends and break up with him immediately. Deal with the short term unhappiness you'll experience as you come to terms with the end of the relationship, then with the pain you'll feel when he does invariably hook up with another girl the moment you've broken up (and don't be surprised if it's someone you know).
But seriously, I promise you the short term unhappiness you'll experience when you break up with him will be far less significant than the long term pain of staying in a relationship with someone who clearly doesn't like you very much.
Best of luck, I hope you make the right decision.
I LIKE YOU!