so sorry to hear about
the way she acts. we have a lot of trouble with my mother and law, and her mother (who we have named evil grandma) and it makes me feel better to make veiled insults to them, that they aren't smart enough to get, plus im southern and they teach us at birth how to make the worst insult sound like a wonderful compliment. makes me feel lots better!
the hardest part is when they are mean to your children, and that iwouldnt stand for, i would have done just what you did. My husband put up with it for a while, but now he makes no effort to see her, they live 45 minutes away but are too busy with my SIL to bother with us.
Anyway, i think the best thing, is to just be as fake nice as you can, while talking horribly about her to anyone who will listen and make fun of her at every chance.
And vodka, that would help
or valium, in her drink :D