i have a similar problem - im living with my mother, while my husband is in iraq. she is incredibly nosey and although not outright vengeful, she can often be very very irritating. she sees herself as smarter and more prepared than me, because she is older and has had children before, etc.. which is a valid point, but i dont always appreciate her getting in my business when i want to solve a problem. she gets offended very easily when i brush off her advice in favor of my own and exert my independence. I'm having my first baby in the next few weeks, and I've been living with my mom since April. Its been difficult, especially with pregnancy crankyness, not to outright attack her sometimes ;)
What I've learned in this experience is that I have to strike a certain kind of balance. That is, be consistent and firm about my own decisions and ideas when I'm around her, but also flexible enough to know good advice when it comes. And when she is nosy, outright tell her to stop, call her out on it. Dont beat around the bush or try to be polite to the point where she might not get it or might misinterpret what you say Communication is one of the most important parts of any relationship, let her know honestly how you feel about things and encourage her to express how she feels. You both already know how each one feels, but this way it gets out in the open, where you can deal with each issue in a logical organized way. Most people are willing to talk about things if you give them the chance. If she doesn't outright hate you, which it sounds to me like you just disagree on some things, then she will be wiling to work with you, for the sake of your relationship and mutual family.