How do you let you mum-in-law know that you will be calling the shots on the upbringing of your child (without sounding rude)?

Make sure you don't make a mountain out of a mole hill, but ensure that she understands that this is your child, and you and your husband get the final say on how he or she should be raised. Definitely get your husband to lead this conversation. That said, listen to her but take all advice with a grain of salt. Be firm and consistent and set the tone right from the start.