Do I sit with my husband and our two kids at my step-sons funeral. His step-father will not be there since he is very ill.

The funeral director will normally have all of the seating arranged and have someone there to do the seating.

They may want you on the front row and your husband (not the child's father) on a second row. There is no firm "rule" so, you need to decide what and how you think is best, given any and all other family that will attend, plus how you are doing emotionally over this.

I agree. You don't even mention the mother or other siblings or how long the deceased lived with whom. Let the funeral director discuss it with everyone and make the decision. That's what he or she is paid for.