Unfortunately, it's inevitable, too, that at some point, your child(ren) will realise that they're not their grandmother's "favourites", too. And - speaking from experience - it will hurt them. Be prepared Saintflop for that day, because it will hurt you, too.
My maternal grandmother made no bones about preferring my aunt's children to us. I was her first granddaughter - but she raved about my much younger cousins as though they were the second coming in disguise. My mother dutifully sent her photographs of me as I grew up, and then when I had my daughter, I sent her photographs of her, in turn. When we visited not long after she and my grandfather had moved house, their lounge was filled with framed photographs of my aunt's children (one of whom is only a few months younger than my daughter). Absolutely none of the photographs my mother, then I, had sent her - including some studio portrait shots which she'd actually asked me for, of my then newborn daughter - were on display. It was like, to her (less so my grandfather as he simply didn't hold truck with photographs or favouritism), we simply didn't exist once we weren't in her line of sight.
And it stung. To the point where, when my son was born a few years later, and she was asking for photographs of him to be sent up... I simply didn't bother. It would have been a waste of my time and money. Consequently, the only photographs she has of my daughter are 22 years out of date, and she has none of my 16 year old son, whatsoever. She now lives with my aunt and the younger two of her children - and displays photographs of the favourite granddaughter's two sons (who are adorable, in fairness) on her bedroom walls.
It is, unfortunately, what it is - but your MIL has made her bed, just like my Nain did. Let them both lie in it. Drop the rope, Saintflop, and save yourself - but more importantly, your child(ren) - from a lifetime of not feeling "good enough", or even simply "enough", for her. Let her fawn all over the favourites... it doesn't mean she'll get anywhere. My Nain, for example, despite her display of my cousin's children and her proud bragging about her "first great-grandsons" (disclaimer: by the time the oldest was born, 4 years ago, my Nain already had 3 great-grandsons, one great-granddaughter, 2 great-great-granddaughters and 1 great-great-grandson!)... has never actually met them. Despite living with their grandmother and two uncles. My aunt goes to visit my cousin and her family - and doesn't take my Nain because (and I quote) "she's too much like hard work" and my cousin "doesn't like her being around the kids". And these are her favourites! 
It is sad, but my advice to you, Saintflops is to simply let it wash over you. Just be prepared for your child(ren)'s hurt when they realise that their cousins are the golden ones. 