My mother in law has been a big help with the baby - but she is always around - and insists that the baby be in her room at night - so that I can get some sleep. As a result I am getting no "alone time" with my baby. It is making me feel miserable...but she is so helpful - how do i say something without hurting her feelings.

I think you can try just speaking and explaining to her how you feel. Since her intention was for you to get some sleep, you can let her know that you really appreciate her help and would not mind having the baby with you at night (so that your mother-in-law can get some rest too!). Recognize and appreciate her effort so that she would not misunderstood your reason for wanting to spend more time with the baby.