Comments/suggestions on Your in Laws?

Try to move on, your husband already told his mom what he thinks about her treatment to the older kids; and he did not distinguish them as grandparents (by sending them a mass email) when your baby was born... nobody is perfect here.
Your husband seems to be a nice person who respects you and loves the kids very much. Try not to give him more problems with his mom.
Looks like the mom and step dad have 'learned a lesson' to include your older kids in invitation. Let them know it's just bad timing that the older kids have school and couldn't attend (they did not choose the date, your husband did), but you appreciate it and move on.
It is like reinforcing the good behavior! You can't force their love, but they could be considerate to your kids' feeling. The change may be gradual, but you will let them know it is appreciated every time.
Try to be civil to your ILs and don't get involve with their conflicts, afterall you are not blood and will always be the one blamed.

I think relationships are tough with in laws but if you expect them to change or want them to change, it seems it will just be tougher.
My grandma was like this with my step brothers. Its the era they were raised with. Some people eventually can evolve beyond that, some can't.
Give the in laws more of f chance to know your kids one on one. See if one of your kids can go by themselves and spend the day.
She doesn't know them as people and its certainly not up to your kids to make the first move but perhaps you can facilitate something -positive.

I'm sorry to hear of such a tough situation with in-laws. We have our little irritations, but basically get along well with all the in-laws in our family, so I'm not sure I have any great answers. I do agree with the other two posts on here and think the advice they give is good.
Perhaps you can make a time that you could have a get-together with just you, your husband and his parents and talk about how you feel. I would suggest perhaps take them out to eat at a restaurant, where they would not be as prone to let out all their animosity because it's a public place. Then plan times when you invite them over to your home to 'practice' being more civil to your kids. Instruct your children in how to treat the grandparents with utmost respect as well. For instance, if your older children greet them as they come in and offer to help with something, it might just impress grandma enough for her to take a different look at them and be more accepting.
One thing that struck me was the fact that your husband has a stepfather and she still acts this way toward your kids. It would seem that, even if she doesn't have other children by the stepfather, she would understand the need for respect for all of your children, simply because I'm sure she must expect your husband to be respectful of his stepfather. You might even be able to mention something along those lines to help open her eyes to what you are feeling with her treatment of your kids.

Sounds to me like the in-laws wanted to see ALL the children and you decided to only send the 2 due to your schedule issues. That gesture seems to indicate that the in-laws have learned and are trying to do better, so give them a chance. At some point you have to let the past go, and move forward, even if it's difficult. Maybe you can choose another day that works for all the children and let them go for a visit. You may be pleasantly surprised.

Good luck!