Hi again twinkerbell - you must remember that your dh's mother and his ex have a shared history - they were once 'mother and daughter', so they are bound to have contact.
I agree with you though, it is strange that your MIL wants to keep contact with her, especially since she has hurt your dh with her numerous affairs and bad behaviour - in fact I find that very odd, but never mind.
Is your FIL still around? Perhaps your MIL is lonely and enjoys the interaction with your dh's ex, perhaps they had a very close relationship before the ex started bonking around? Perhaps she is overcompensating, because she is scared of losing contact with her grandson.
Whatever the reason, it is not fair on you or your dh. He has left his ex and has started a new family - you and you new little family should be his first priority.
It is also possible that your MIL is not aware that her actions are affecting you. Maybe sit her down over a cup of tea or take a walk and tell her. Say to her that you do not expect her to break contact with the ex, but that you would be very grateful if she would stop discussing you with her - tell her that you would love to have a close relationship with her - tell her that it would only be possible if you could trust her not to repeat what you have told her to others - tell her that you love her son with all your heart and that his happiness is important to you - tell her that he has been very unhappy about being cought in the middle and that it has affected your relationship with him - ask her if she has any suggestions about how you can all try and make the situation better.
If talking with her doesn't help, then I am afraid that you are going to have to just endure it - as you only see your MIL once a month, it should hopefully not be too hard.
If at all possible, invite your MIL over to stay for a week or so, every now and again, so that the two of you can start building your own relationship away from all the other negative influences.
Good luck.