Omigosh....do we share a mother-in-law?!
I was nearly 30, married, and we'd been together for 10 years before we had a baby.....and she made me CRAZY!!!!!! So I can just imagine how much worse it must be in your situation.
FOR NOW my advice would just to be to bite your tongue until you get out of her house. Start distancing yourself from her and her "help" as much as possible, but don't do it in an emotional way. Even if you have to say, "Well, this is our baby, and we have to raise it our way", do it in a completely calm and bland manner. She will USE any negative emotion that you show against her, and just get worse!
Good luck, and I hope your situation improves SOON! In the meantime, maybe it will just help to know that your rant has been heard!