Honestly, I don't think that there's a way to do this without hurting some feelings. The key point would be to minimize hurt feelings as much as possible, while also doing both what you feel is right and maintaining your relationship with your in-laws.
I agree, I wouldn't want my little ones going to a very conservative church, even at a young age. You never know what a sermon is going to be about, and some things really stick with 3 year olds. I also wouldn't send a 3 year old to sunday school alone.
We're Jewish, and my mom's temple has a "tot shabbat" that is specifically for families with young children. Everyone's involved at the same time. You could see if your church has something like that and invite your in-laws to join you. Hopefully they'd be flattered by the invite, and pleased that you're taking your kids to church.
If there isn't a children's service at your church, you could try to skirt the issue by inviting them to come to church and then over for sunday lunch. In other words, bring them to you, and have the whole family go to church together. Yes, it will be a bit of a pain with the 9 month old, but hopefully it helps your in-laws see that you do intend to raise your children "in the church" and will back them off from insisting on either their church or sunday school.
If that doesn't work and there needs to be a more pointed conversation, no matter how close you are to your in-laws, make sure you're on the same page as your husband and make him have the conversation. You don't want to be blamed for causing a family rift, even if you're being reasonable.
Good luck.