Hi E.,
I would probably have handled it poorly. You are right, the woman needs to grow up. Maybe the better way to handle her is to ask her questions about the present and the future. Obviously you have no real relationship with her, and so when she sees you, she talks about the only thing she seems to know about and that's the past. If she makes a dumb comment again, you could say, "You know, this is getting old." Or, "It's one thing for a child to be rude, it's another thing for an adult to act that way." She might catch on, and she might not. Or, "So how are you any better?" Unfortunatley, the resorts don't resolve the situation, they just make it worse.
When I was a kid, we moved. I knew EVERYONE in the neighborhood we'd moved FROM, but in the new neighborhood, it was hard to make friends. There was one girl, across the street and my sister and I played with her. There were a bunch of boys, and in the winter, they took aim with snowballs as we walked to or from school. Once, when visiting my mom as an adult, with kids, I discovered that the one in my class now owned his mom's home, and lived there with his wife. We had similar aged kids, so we ended up talking, I loved his wife, and I also discovered that he has grown up into a loving and very responsible man. I wish I'd been able to have seen him as a person back then, rather than the as a kid whom I'd been afraid when I was a child.
I wasn't rude enough to tell his wife what I'd thought of him when i was a kid, because, honestly, I thought it said more about me than about him ! I'd put him in a box in my mind, and that's where he stayed until I met his wife and kids.
You might ask her if that's the only thing she remembers from her childhood. You might tell her that if she looked beyond her first impressions of people, that she might find they are worth knowing.
I suspect your husband simply paid no attention to her in the past, brushed her off, or whatever. And she got her nose out of joint. And it's probably not going to change, because he isn't about to spend the time it would take to soothe her bruised ego. And he shouldn't spend that kind of time with her. While she is a pain in the butt, and she is chronically rude, she is probably embarrassing EVERYONE, not just you and your honey. Are there other people you can hang with that do not include this lady ? It seems that you need a different and more interesting circle of friends.
And as far as your husband goes . . . just reassure him of all the reasons you married him, and why you continue to love him. there are always going to be jerks in our environments, but if we tune them out, we stop hearing them. (another approach to her, is to use "behaviorism" on her. Ignore her comments so resoundingly that it's as if she never spoke. Her words will lose their effect immediately. This works best if you can also come prepared with lines of your own that totally change the subject, as if she never said her nasty comment at all. And really, it is a childish thing she is doing, and not worthy of hearing. If the town is small enough that you have no choice but to run into her repeatedly, that's probably the best approach. Simply change the subject, or ask someone else something, as if you never heard her nasty words -- when she fails to non-plus you, she will find a better way to get attention.
and the amazing thing, is that it REALLY works. I've had it used on me. . . . and I knew it was happening on purpose, and it worked really well anyway !!