Meddling, micromanaging mother-in-law

Since my husband and I were engaged (and some before) my mother-in-law has meddled in and attempted to micromanage details of our lives. She (not a Christian) called my house of worship a "__ing church" when she thought we were getting married in a church. She criticized the invitations, registry items and other details of our wedding, which she did not pay for. We let her have her way on the church issue and I have regretted not having confronted her then and since. She has been condescending, rude and hurtful, often in my own home. When visiting (I brought my daughter to visit with her and her mother) she invited me to watch a commedian, Bill Maher (I was unfamiliar with him at the time). He could not have been more offensive to my religion and she sat there laughing at his jokes with no concern that it would offend me. My husband and his father do not appreciate her constant criticism, but deal with it by ignoring it for a time and then, when they cannot take it anymore, unleash their fury. Ultimately, she forgives them, but forgiveness that is extended to husbands and children is rarely extended to daughters-in-law. My husband wants me to also ignore her, but never unleash my own fury, which is what I have attempted to do over the years and is clearly not working. After ten years of marriage, I am sick of being told what activities she thinks my daughter should be involved in (without any concern for our finances), to check the copious amounts of email she sends (at times are offensive), and basically being treated like one of her students, figuratively shaking her finger at me about what I need to do here and there (the incessant "I think you need to ..."). I don't enjoy Thanksgiving or Christmas anymore. Her behavior at times has been quite appalling and my attempts to deal with it peacefully leave me feeling like a doormat without any improvement in the situation. She has humiliated me in my own home at times in ways she thought I didn't catch on, bringing me to tears. She once verbally ripped me up over the phone (supposedly directed at both my husband and me) over not calling to check on her ill mother when all efforts for her mother on our behalf are on my part, not my husband's. She is constantly contradicting even little details, even when she is wrong, insisting she is right. She never admits wrongdoing and NEVER apologizes. Things, like the wedding fiasco, are allowed to blow over so she never has to say she is sorry. I have done some research on what the Bible says about this, but one site seems to suggest that 1) I continue to be a doormat by making peace, yielding and seeing her as better than myself (Philippians 2:3, James 3:17-18 2) walk away to avoid confrontation, to which she finds some reason to be offended by my absenting myself for a Starbucks latte. My husband and I are discussing several options for dealing with this because it has become intolerable for me. We have considered him having a talk with her or me becoming more assertive and up-front, but kind. Any suggestions?