M.,
My husband and I have had many boundary issues with both our parents but definitely much much more with his mother (we live closer to her and she is more controlling). When it comes to dealing with boundary issues a good discussion can clear up a lot of difficulty. Make sure your husband is willing to back you up before you battle it out though. If you don't have his support things will only get worse instead of better.
If this is the first grand child then the MIL is adjusting to the idea that SHE is not the one in charge anymore, and that adjustment could be even harder for her when she is caring for your sweet little boy. The mental change from Mother to Grandmother is often a difficult one for women to go through, add to it all the emotions of being a new mother in you and things are naturally tense/awkward in the beginning. Things should get better though.
With stuff such as my MIL redressing my children (extra coats, buys hats b/c mine are not warm enough in her opinion), I get incredibly annoyed but I save my energy for bigger battles... such as when we told her NOT to take our daughter (not yet 1 at the time) for Acupuncture and she did anyway or when she hooked our older daughter into the carseat incorrectly because she was sure we had to be wrong in how the car seat should be hooked into the car and how straps should be fastened (I'm so thankful my daughter did not choke and that there was not an accident... it was so badly jiggered that one strap was literally around my daughter's neck b/c my MIL thought it would hold her in better!).
My husband and I sat down and wrote a list of what annoyed us and why. Most of it came down to a power struggle and his mom communicating to us that we were inadequate in our care of our children. Considering that new parents already feel like they don't know what they are doing the criticism was very straining on us. With list in hand we arranged a meeting with his mother and explained to her that it is very important to us that she be involved in the children's lives but that if she did not listen to our instructions then we would not be able to trust her with our children. We explained that certain things annoyed us but didn't do any harm to our children whereas other things she did directly harmed one or both of our daughters. We explained that she needed to be respectful of our position as the girl's parents and what we decide is best for them. We explained that she had done a good job raising my husband (even though sometimes we questions how he survived! we did not tell her that) and that the role of grandparent is different than parent. The meeting was mostly a clarifying of roles. (A grandparent does this and a parent does that).
For us the issues got worst when I was hospitalized last year when our daughter was 1 1/2, but now I am able to stand my ground and remind her that her gestures are well intentioned but that certain ones are not welcome. At one point we had to threaten that she would not see the children for a while if a certain behavior continued, and for the past year she has only seen our children with supervision. Now that she is respectful of our position and we know our children are safe with her, she can have unsupervised visits again.
It was painful for us to need to put restrictions on her visitation with our children but we had to do it for their safety. Though it was difficult to go through, we have somehow gained my MIL's respect and she realizes that we do want what is best for our children.
I would suggest discussing the situation with your husband. Figure out what boundaries you'd like in place, what things are really important or what things are petty and can be overlooked. For us we determined that even though we are greatly annoyed with the extra clothing when we take the kids to the car, that they are not physically harmed by that action because I can take the extra unneeded items off the kids in the car (so they don't overheat!). So, I ignore the extra clothing issues but I get very aggressive over anything that can harm my children or that questions my husband and I's authority over our children.
It is ALWAYS hard to work these issues out, but take into consideration what is most important so you don't get irritated with her over every little thing.
Learning to get along with an MIL is a delicate and often time consuming process.
I hope it gets worked out easily :)