Catholic: I have read this thread through my fingers. I really don't envy you and I agree that you have to nip this in the bud, yourself if you can as your DH is clearly not stepping up to the mark. Your situation is uncannily the same as mine was. Things are much better now but I did have a nightmare struggle of control and psycho behaviour for 2 years.
My MIL is irish-catholic mother of 4 boys, of which DH is the eldest. DD (now 4) was her first grandchild and most definitely the daughter that she never had. I too heard conversations between DH and MIL with regards to her travelling down for the birth (she is in liverpool and us in london). However DD came 5 weeks early so she surprised us all. We were in the process of moving out of London into a house when DD made her appearance. We had to stay in hospital for a few weeks after so DH moved with the help of our families while we were in hospital. This meant that I had to come home with DD to a new house that my MIL had not only seen before me but had cleaned and placed all the furniture in. I was obviously grateful for their help but it made me feel like I wasn't the master of my own home. And this pretty much set the tone of our relationship after that.
MIL would descend on us whenever she felt like it and stay for a week at a time. I used to say to DH that it was my house and that she couldn't just come when she felt like it, that she at least had to ask. But he could never see my problem and would say that I was ungrateful. But the worst thing was how she was with DD. Intense is not the word. I caught her referring to herself as Mummy on quite a few occassions. She used to take her off for walks and be gone for hours. She always wanted time with DD on her own and I was basically pushed out of the picture, I think because my presence spoiled her being able to play Mummy. I remember once when she was visiting I was going to bed and went in to DD's room to check on her only to find MIL sat at the end of the cot, in the dark, staring at her. When we went to visit them in Liverpool one time (DD was about 5 months) she had set the travel cot up in her room instead of ours, saying that it was so that we could have a lie-in. I think DH realised that her behaviour was psycho and not on but he would always get defensive about it when I tried to talk to him.
Eventually another grandchild came along, and then DS came along. So her behaviour was diluted somewhat. She is not nearly as intense with DS as she was with DD. Although she still came to stay two days after we came back from hospital with DS and stayed for over a week which meant that she was here for the entire time of DH's paternity leave.
Things are much better now. Although we do still have the odd little incidents. Last year I had to tell MIL why it was utterly inappropriate for her to go and get our dirty washing from our wash basket in our bedroom and put it in the wash. She thinks she's being helpful and doesn't realise that she is overstepping boundaries.
Sorry this has turned into an essay! But I really do think that you need to knock this on the head now. It will only get more intense once LO is born. And I know it's tough but I think you need to do this. YOur DH sounds just like mine and he just won't stand up to her.
Good luck, hope you get the birth you wish for!