L.
I would bring it up now. Simply state to her that you know this is may be and akward subject but you want to discuss it because you want to make sure you are both happy with the arrangement. In addition, talk about what the specific responsibilities.
I would put into writing what questions you want to ask before you address the conversation. Also, set up a time to do so when neither one of you has your kids - so you can not be distracted.
Create a list for yourself about what you are willing and NOT willing to do. Also, decide what hours you are willing to work and what you want to get paid. This is a job not a favor for her, you deserve to be paid appropriately and have parameters. If you both have widely different expectations, you both will be unhappy.
As for the going rate of $10-$12/per hour that is for someone who is watching children without any of their own, so I would expect less. I would also broach defining the amount of hours per week and vacations. Are you supposed to arrange your vacations around hers? How much vacation do you get? Is it all unpaid? Is she going to guarantee you a certain amount of hours per week? Most people do guarantee a certain amount of hours per week. How are you going to track hours. Is she going to deduct for 1/2 hours, you to add for 1/2 hours? I use a set amount per week for my nanny and she has a starting and ending time each day. If I let her go early, I don't pay her less. Also, if she stays a little late, she doesn't charge me and we are both happy that way.
Also, how will this woman reach you during the day - what are her expectations there?
By not defining anything she will take advantage of you - even if it is just because she isn't thinking about it. You wouldn't take a job with a corporation without knowing these things and this is a job too. A huge job and is vitally important.
It is ok to be straight up. It can be hard to broach these subjects, but it will be worth it in the long run and remember she is getting something great with you.