Hi all. Thank you so much for sharing your thoughts and your personal experiences. It's helped so much. 
DP has pretty much decided he's going to ask FIL to tell SMIL not to attend. He's waiting til he sees him the weekend after next to have the conversation in person.
MIL is adamant that FIL should not be told of her feelings (understandably, I think). However that puts DP in a pretty awkward position as to what reason he should give for the lack of invite. He thinks MIL basically wants him to say he doesn't want SMIL there, which 1) is untrue and b) very hurtful.
He is very encouraged by some of the comments on here about how this could be the start of some healing between his parents. He wants to ask MIL and FIL to have a phone call sometime before the wedding, as a PP suggested, to maybe make it easier for her on the day.
To answer a couple of questions - DP isn't an only child, he has a brother. Brother feels MIL is being selfish, and also said he thinks that she has been waiting to do this for a long time. However, BIL is younger, still at home and has a somewhat strained relationship with MIL at the moment, so I'm taking that with a pinch of salt.
No, FIL didn't start another family with SMIL, but DP is very close to his step siblings (her kids from a previous relationship), as am I.
DP really didn't guess that MIL would feel this way. He's not some insensitive pillock, I promise - he knew that things had been really bad in the past, but they are a very 'stiff upper lip' family, and for the most part the topics of the divorce, FIL and his wife are avoided. But in the last few years she's been quite positive about his dad, has encouraged us to visit him (he lives down south), even told us we should spend Christmas there rather than with her. So I think DP thought a corner had been turned. (I did ask at one point if there'd be any issues re seating etc, and he told me to give her a bit more credit!!)
Yes, I do like MIL. She raised my amazing DP and there is no one more generous with their love and time.
There is something that's been rankling with me though - years ago one of DP's cousins made some comments publicly on FB (I know) about me - basically saying I wasn't good enough for their family, criticisms of my family and background etc. I was really gutted and humiliated. MIL knew what had happened, knew how I felt but totally refused to take my feelings into account and almost seemed to make a point of ignoring them. She made me sit with him at meals, pose for photos with him - I told her lots of times how uncomfortable I felt but she told me i was being silly.
It was years ago, I was very young, and I know it in no way compares to what she went through but I remembered it yesterday and had a 'hmmmmmm' moment.
And yes, DP would like SMIL there. But that's something he is definitely willing to sacrifice if it means MIL being there.
One last thing - we really, really don't think everything should be about us on our 'special day '. There's no top table, there will be no forcing people to be in photos etc. We just want a celebration with the people we love, who will help us to shape our relationship and support us and share in our happiness.
Thanks again to everyone who posted.