Yes, indeed seperation is a must! and the compensation is to bear her burden till she decides to move on.
By the way isn't it unfair not to include woman's choice in all this? Just curious to know, will she be willing to stay with the man knowing what she has done is against Allah SWT Will and against His laws? Should she keep on living with her so called husband? Is not a man and a woman equally resposible for what they do? Sorry for so many questions, there are so many things going on in my mind right now. :)