First, I would very nicely send FIL’s family a reply card, thanking them for making you feel welcome, but that you cannot go as your family is not welcomed by the rest of the family because you are (quote the nasty MIL here, whatever awful word she used) say that you appreciate the offer but unfortunately it is not shared by (mother inlaw’s name) and that it is an embarassing situation for your daughter and her side of the family. You keep the peace by humbling yourself and not saying anything, but you thought they should know so that they could possibly make it easier on your daughter. Thank them, try not to allow your anger to be shown in the letter.
I think your daughter in law needs to stand up to her MIL. Does she give them money? It almost sounds as if they are dependant upon MIL’s money and she holds it over their heads.
I am so sorry you are going through this. I have a similar situation with my MIL but it involves us being Catholic and her being anti-Catholic, she refused to go to all three of my children’s Baptisms. This must be really painful for your daughter.
Our priest this past week as discussing what he calls “Yes” Catholics and what we call “Cafeteria Catholics” and how he was on a trip to Mexico City and sat on a bus or train with this elderly, obviously wealthy, woman who talked about how she goes to daily Mass, prays the rosary, touting how devout she was… yet made horribly racist comments about the people in Mexico, talking about how they should not be allowed to breed because they were poor etc. He was angry that a person could appear to be a devout Catholic, yet miss the whole message and be a racist.
Know that no matter how much this hurts your family, this wreched woman is hurting her own soul far more, and it is possible she will never change.
In my experience, at first I tried to get along with my MIL, but it finally got so bad that I had to take up for myself, my children and my family. I had to “Lay down the Law” It was hard on us, but she eventually changed a little. We have a policy, and she knows this, that the minute she makes any rude comments, we immediately pick up and leave, no arguing, no confrontation, we just give her time to think about what she has done/said. Almost like a time out for an adult. After 10 yrs of this, she has changed her tune and is much more careful with what she says/does.
The important part of this is I had to decide that no matter what I would not allow her to drive me to sin by allowing myself to act in anger, hate, or revenge for her actions. I also prayed for her and still do. Turns out she had an impoverished, difficult childhood, had depression and is very lonely in a miserable marriage. Who knows what has happened to your daughter’s MIL to make her such an awful person.
Focus on your family, keeping them loved and nurtured. Don’t allow this hatred to take away any part of who you are and what your family is all about. I know this is easier said than done, but the more angry you allow this awful woman to make you, the more likely she is to “win” her way. She wants you to feel like the scum of the Earth, be the strong and loving mother that you are called to be. Your daughter needs to learn to be the head woman of her own little family and step up to disallow this evil to have a control on her family. I know this is easier said than done, especially if your Son in Law is having his income supplemented by her.
Your daughter should also decline any Baptism party put on my her MIL. What good is a Baptism party if not to Share the time with your family? It sounds like your daughter is an a bad situation, but it is *her *situation and all you can do is be her mother, and the children’s grandmother. Try to be supportive without putting more pressure on her. She is probably already under alot of emotional stress from this, so try not to add to it with your own pain.
If you have the money to do it, throw the Baptism party, and be sure to kindly invite everyone, including the monster who probably wouldn’t come anyway! It doesn’t need to be fancy, just loving, and welcoming! You could even throw a" Welcome baby to the family party" if you can’t do the Baptism party. It doesn’t need to be formal, you could do it at your home, or a park pavillian. Try to focus on the Joy, and give your daughter a “home” where she can feel loved for who she is. Try not to push her into standing up to MIL or anything else, she needs to come to that conclusion on her own, just love her.
"(he was joking, trying to keep it light)
last night I figured her FIL’s family must know after 30 years what kind of woman he married anyway. There is no reason my daughter needs to stoop to her MIL level on what is suppose to be a very important day in her baby’s life. To her MIL is all about the “party” To me the “party” is not important, its My little Grandson recieveing his very First Sacarment. 
