You should respond to the relevant allegations, but don't waste too much of your affidavit going into excessive detail about your version of the truth on every little thing, especially if it doesn't affect the children's matter. For example, a lie about how you threw one of your kids down some stairs and broke their arm needs to be addressed - I didn't throw X down the stairs. X fell down the stairs and I took him to hospital immediately with concerns that he had broken his arm. A lie about how you once left a paper bag of poo on Aunt Mildred's doorstep when you were 15 is irrelevant, so it doesn't need to be addressed. Extreme examples, but you get the drift.
It might be a good idea to headline a part of your affidavit with 'Response to Applicant Affidavit' and state things like 'In response to [whatever paragraph], I disagree that [whatever fact is wrong] and say that [whatever you think is correct].' The facts will generally be determined in cross-examination anyway, which is all about discrediting the other party. If she's lied, then cross examination is where that will come to light.