Your husband's reactions are very, very normal for someone who grew up in a dysfunctional family - he filters out what he can, and gives in on the rest. It's a coping mechanism he developed when he was not in a position to leave or defend himself.
While normal, though, this type of reaction can cause serious problems in other relationship, as you've just seen. Personally, I would be absolutely livid about the name issue - he let his mother win and get to choose the baby's name, *and* he used the fact that you were reeling from extended labour to push it through.
Family counselling can really help in situations like this, with a therapist specializing in this sort of thing. It can provide an independent viewpoint, and teach you constructive ways of dealing with toxic relations. A toxic relative, and a spouse who gives in to them, can destroy a marriage. The name thing, by itself, would be my point for insisting on family counselling for the sake of the marriage. If she can get away with that, what will the next thing be?
As far as other stuff goes - drop out emotionally. Stop buying thoughtful gifts for her. Let your husband handle birthday/christmas cards and gifts, and any phone-calls, emails and letters. And make it very, very clear to your husband that she is to have zero input or control over anything in your relationship or involving your children, making as big a fuss as necessary to get the point across.