I think you need to separate the fact that you -for obvious and sensible reasons- don't trust your own parents as people from how your dh's parents - who are clearly quite different people- might relate to their grandchildren.
Let's face it, you wouldn't want your own love for your children distrusted because there was a lot not to trust in your parents' love for you.
Dh and I were both privileged in having parents who were loving without being obsessive or controlling, loving in a kind of natural cheerful way, with full respect for children as individual autonomous people, though in need of a certain amount of guidance.
When our children were born, that attitude just carried on: they loved them naturally- because in their heads, why wouldn't you? loving somebody you sent time with or had any kind of connection to was a normal thing for them. They enjoyed being with their grandchildren, but at the same time respected our role as parents.
This may well be the attitude of your ILs- if that is the case, cherish them. Having love from different places- healthy, non-burdensome love- is a great thing for children.
But yes, absolutely understand your concern about your own parents. It may be that they are better able to handle grandchildren- a less tense relationship- but you may also want to keep an eye. The good news is that children are far less likely to be damaged by unsuitable grandparents than by unsuitable parents, because it is such a different relationship. Most strong and well supported children can accept that "yeah, grandma is a bit odd but we'll just deal with it" while they need to feel that their own parents ring true and can be trusted.