I want to thank everyone for the responses.
I have written down all of the books suggested and will look into them at the library.
I agree with those that say that there needs to be a better environment for our dd. She really loves my mom and the majority of the time, there are no issues at all with them - it's when things happen that I just get my mama claws out. Dd is 8 now, and knows that if my mom starts talking short with her, she can walk out of her rooms and come talk to me. I've had many talks with my mom about it. She did say last time that she is going to try to work on that. I asked dd last night at dinner (mom's gone visiting) and dd said that my mom has not lost her temper with her for a very long time. Dd also needs to step it up a little and not trash my mom's rooms with her toys and crafts as much. My mom gets most frustrated with dd's messes and since she never learned how to discipline, just punish, she doesn't handle it well. I've told her that rather than yelling at dd, like she did us, to tell dd that until she picks up her toys, she can't play out there any more. Clean up the mess first, then they can play. Works for me. If my mom would stop yelling, that would be 80% of the battle right there. Other than that, she actually does respect my parenting decisions... she's never tried to spank or punish the way she did us.
As for kicking my mom out... dh just won't do it. We put on a $$$ renovation/addition to our house for her. He's not going to pay rent as well. That is certainly something I would consider, but I'd have to go back to work full-time and I can't do that with dd's school being an hour away. It's also not a sacrifice that I will make for mom. Dh and I planned our lives for me to be a SAHM. I work 15 hours a week in a job I love at a library. I will not go back to the daily grind I hate and not get my summers and vacations off with dd just because of my mom. That is not something I will compromise on.
There is a subdivision for >55 in our area. It's quite nice, although they are all trailers. Definitely *not* your typical trailer park neighborhood... it has a HOA and everyone must keep up their places immaculately. We could, by sacrificing our savings habits, buy a place there, then the lot rental is only about $250/month. I've contemplated that, but dh nixed it last night. So mom moving out will not work.
My sisters (they are half-sisters) are not able to help. One is going through a nasty divorce and is barely making it on her own and the other (oldest) had a mid-life crisis when she hit 50 and took off. I'm not even sure where she is and haven't known for a couple of years. I do NOT have a good relationship with the her and the middle sister is too selfish to help out even with her time (as is evidenced by her comment last year when I asked her to take mom for 2 weeks).
So, in talking with dh and telling him some things mentioned here, he said that I'm just going to have to put my foot down with Mom. I can't MAKE my mom help out around here more. In truth, she doesn't make ANY messes in the main house because she's only in here to eat and use the bathroom. It would just be nice for her to help out that way, just because she appreciates that we're supporting her. I will talk to her about this.
Dh is from a country where you take care of the elderly no matter what. They literally do not have nursing homes... the families take care of their own. His sister took care of their mother for 10 years until her death. He takes this responsibility very seriously. He said we can sit down and talk to her and just explain that we need to set some boundaries (especially about the food), but that asking her to pay us is not something he's comfortable with. I respect that... the key is getting my mom to respect that as well.
The thing that I think *I* need to get over is feeling guilty when she pulls her passive-aggressive stunts. The comments like "I can't do anything right in your eyes", I need to follow up with something like "when it comes to the way you treat my daughter, it's my right to ask you to interact with her with respect" and just leave it at that. I'm not going to respond to her passive-aggressive behavior anymore. It's something I have to do... even if I have to go to a counselor to learn how to do it. I've not ruled that out!
Anyway, this has helped me think through this a lot more. I don't necessarily agree with everything everyone has said, but it's ALL good food for thought and I appreciate every comment. I'm open to any and all ideas on this, so if there are additional thoughts, please let me have them.