This is a difficult one, i feel for you i really do. I've been in sort of the same situation twice with my parents. My father had terrible alzheimers, and i was really quite worried about taking DD to see him when she was born. I was worried how he would react, i knew he would adore her but he might not understand when we needed to leave, etc, the poor man changed so much. I never had to make that decision as he developed lung cancer and died when she was 8 weeks old having never seen her (something i'll regret for the rest of my life). Now, to say my mother is a difficult one is an understatement. In fact i have started more than one thread about her over the past few weeks. I think she is mentally ill TBH, or having some sort of breakdown. At this moment in time she is not speaking to me and i feel guilty about this but i actually feel qutie calm this week and unstressed (long story)> But, i do worry that she is isolating herself and not seeing my DD which i think is really sad for her - im letting her stew in her own juices and i know she will come round, but i am an only child so it is a big worry to think of her festering all alone basically.
You do have to ask yourself if you are REALLY scared for your childrens safety? One would assume that she would not be released into the community if she were considered a danger to herself or anyone else (i know thats not straight forward). I know MIL can be shite at the best of times, and you sound like you have your hands full with yours. I do wonder if you could find it within yourself to do her this one favour though, yes it will be a crap afternoon for you, yes it will be worrying and uncomfortable and the kids probably wont enjoy it. There must be a way to guage her mood, could DH go first and call you if things seem ok?? It would probably mean so much to a very lonely and scared person (i can imagine that Bipolor disorder is hell, given that suffering from PND is bad enough for me!) and that seeing her grandchildren could be something this lady has hung alot on, it may be something that could help her through her illness.
Only you can answer to yourself why you dont want to visit, and if you feel that your children wont be safe then don't take them, but otherwise, please give this some thought. I would give anything if i could turn the clock back and had taken my DD to see my dad before he died, but i made excuses to myself, it wont be hygenic (he was in a care home), the other residents would be smothering, he might hurt the baby (yeah right, as if!!), he wont know its his grandchild etc etc etc - i have to live with that decision for the rest of my life