Well, we saw her at the funeral, of course. (DH said that he really didn't think we'd run into her. I responded "have you met us? we have the worst luck!")
Anyway, she was on her absolute best behavior. Best I've ever seen. Some cousins told us that MIL had become a much more stable person in the last year or two and had mended a lot of fences with other family members. She's always been they type who HAS to be fueding with someone.
I'm not sure if finding out she had a grandkid was a wake up call for her to straighten up or what...
So, it all ended up to be a lot less awkward and uncomfortable than I expected it to be. Now we have no plans to let her completely back into our lives, but I think we're open to discussing some short (supervised of course) visits.