Hi there,
I just read all the other posts you've gotten so far. You know you are going to get a LOT! Everyone has stories and opinions about baby sleeping. The no-sleep club has a lot of members and unless you have lived it, you just can't understand how tiring it is.
You are obviously a very good mother, and working full-time to boot! You need some rest and I feel for you!
Since none of the other moms (yet) have suggested it, let me be the "mean" mother who will tell you that for a lot of babies, the "cry it out" method WORKS. I feel terrible for my friends who just won't do it and suffer terribly from sleep deprivation as a result. I am not saying that it works for every child, and certainly I would never recommend it if there were other health or hunger issues, but if your baby is healthy, it will probably work.
Here is what to do (by the way, my second is now 6 months old and I decided at 4.5 months that it was "time" - I was exhausted and ready to get some sleep. This WORKED. And it worked great for my first baby, too).
It starts during the day, not the night. If your mom has the baby you are going to have to get her on board. Your baby has a classic case of not knowing how to self-soothe. She is soothed to sleep by being held (oh so wonderful for both giver and baby but not in the long run, because poor baby doesn't know how to stay asleep). When she rouses during naps and at night, she cannot put herself back to sleep. This is not her fault, she just doesn't know how, but she will learn if you give her the chance to!
Anyway, start during the day, not at night. Put her down for her nap when she is drowsy and let her cry and fuss if she has to. DON'T WAIT TILL SHE IS ASLEEP TO PUT HER DOWN FOR THE NAP - SHE WON'T LEARN HOW TO SOOTHE! If you want to give her the binky some, do, but honestly, she will probably drop it and at some point you'll just have to let her cry -- like another poster said, you can't get in the habit of going in there every 15 mintues to put the binky back in; you still won't get any sleep. :)
If you do this consistently during the day, your nights are automatically going to get better. I gave a friend this advice 2 weeks ago and it worked like a charm for her, too. Once your baby is doing better during the day, then it is time to work on the night. MOve that monitor somewhere else - I put mine a couple of rooms away as I am a light sleeper, too. That way I can hear if baby is truly crying but I don't hear every little fussy noise she makes when she halfway rouses.
You may find that fixing the naps will automatically get her sleeping through the night. If not, you may have to let her cry some. It took 3 nights with my 4.5 month old. First night - 50 minutes (really tough), 2nd night - 40 min, 3rd night - 20 minutes, and blissful sleep all night long (8pm-7am with a feeding at 10 pm) ever since.
So the other moms can say I am mean, but my baby is happier since she is well-rested, and I am definitely a better mother when I have rest. The whole family is happy and rested. When I hear of 2 year olds still sleeping in bed with mommy and both parents are wailing that they can't get him in his own bed, or I hear of 11 month olds not sleeping through the night and the parents refuse to let them cry it out, it is not the poor child's fault. Now, let everyone call me judgemental. I am not; I respect other people's decisions for thier kids. I just feel for them because I know they are not getting any rest, and there is a simple way to fix it if they would just try. I know that this doesn't always work for everyone, but it works for a LOT of babies. But a lot of parents just aren't willing to do it. Trust me, the baby does not remember it and they are not going to feel anger toward you. When the baby wakes up later, she smiles at you just the same and mine just loves me to death!!! :)
Good luck!