Hi L.,
I will try to be as succinct as possible, so if I gloss over something and you have a question, please feel free to get back in touch and I will try to explain better.
First, determine whether or not he is truly ready. Yes, it would seem to be easier to deal with a new baby if the older one is trained, but the last thing you want is for him to regress when the baby comes. We approached the issue for almost two years with our older child, but she was very resistant. Doctor told us not to worry until she was 5--she was 22 months when Santa left her a potty, but was finally trained at 3 1/2 years. I wanted her trained before our second one was born (first just turned 3), but also didn't want her to "forget" once the baby needed our attention. So we left the potty out, but didn't push the issue. I really didn't mind having two sets of diapers to change--it really wasn't that bad.
When she turned 3 1/2, though, I felt it was time. The baby was almost 6 months, so it seemed like a decent time to try. She resisted like mad, but through trial and error we figured it out. Here is what worked:
I took one solid week when everything was devoted to this. She was naked during all waking hours of the day. Every time she went on the potty, she received a Hershey's Kiss--until she figured out to go a very little bit a lot of times to get more chocolate!!! Then that was only for poopy and stickers were for peeing. I also made up a stupid little song that I would sing every time she used the potty. We eventually graduated to the "big girl" potty and used the chocolate/stickers again to get her to use the regular toilet. The first few days were impossible, but she started to get the idea. I ended up keeping her naked for 2 weeks rather than 1, but it worked. This was recommended to me by others, and also to do it in summer when she could play outside and not make a mess inside--unfortunately. I picked a week when it was cool and rainy, even though it was August. SHe also began only going when I started to nurse the baby, so I would say that I was nursing, she would run, and I would go help--before I actually nursed. I had been right (as far as she was concerned) about her thinking that the baby was taking away attention that she wanted.
Please let me make this clear--I have never been one to condone bribes like chocolate and stickers--until I could find no other solution. I was at a loss. After days of trying, I had my husband bring them home to see if it would possibly work. It wasn't a magic charm, but did help the situation.
So here is my advice--if you can take one to two weeks to devote to this endeavor, that would be great. No worries about daycare or your MIL. If not, check with the daycare to see what they recommend. If you and the daycare are on a similar track, you can tell your MIL what the plan is and ask her to follow it as well.
By the way--congratulations on the newest addition to your family! They are so much work, but so well worth it!