T.I.
First things first... your children should be handling their responsibilities as though your mother-in-law is not even there. After all, what did they do before she came, and what will they do when she leaves? My four oldest kids, ages 5, 6, 7, and 9 are all involved in sports, and other extra-curricular activities. I know we have been spending 4 nights a week and Saturdays at the ball field for some time now. But I have not allowed my children to neglect their chores. The are still expected to make their beds, put away laundry, clean their rooms, help clean the kitchen after dinner, etc. And of course they MUST keep up with homework and studying as well. Yes, I let something slide now and then, and pick my battles, but they are learning how to balance work and play--an important skill for the future.
As far as your mother-in-law is concerned, I am appalled by some of the responses you have received. My question is this? Would this even be an issue if it was you OWN mother instead? I mean if it was your mother, but with all of the same behaviors and opinions of you MIL? Why is it so easy to pass judgment just because it's HIS mother? If the roles were reversed, how would you react if he made the same accusations/remarks about YOUR mother? These are the questions I would ask myself before talking to your husband. I agree with Ana G... this is the perfect opportunity for you to show your husband how much you love him, and how much respect you have for the woman who raised him. Also, you are setting an example for your children to follow. Yes, one day you will be the MIL and sadly there is always the chance that you could one day be in the same situation as your MIL. How would you want to be treated? We all want to say how we would act or what we would do in anothers situation, but the truth is that we don't know know until we have walked a mile in that persons shoes, so to speak.
My advice is to ask yourself these questions, then choose your words wisely. Discuss this with both your MIL and husband at a time when you are calm and in control, not when you are frustrated or angry. But remember, your MIL deserves the same amount of respect and care that you would bestow on your own mother; she is no less of a mother/woman just because she is HIS mother and not YOURS.
Good luck! And God Bless!