Hi L.,
The smoke is a big concern - even if they don't smoke around the kids.
A recent scientific report found numerous harmful chemicals on the clothes, fabric, furniture etc. leftover from cigarette smoke. The metals and other toxins can be easily ingested by young children and is why they are calling this third-hand smoke.
Here's something from the study:
"Small children are especially susceptible to third-hand smoke exposure because they can inhale near, crawl and play on, or touch and mouth contaminated surfaces. Third-hand smoke can remain indoors even long after the smoking has stopped. Similar to low-level lead exposure, low levels of tobacco particulates have been associated with cognitive deficits among children, and the higher the exposure level, the lower the reading score. These findings underscore the possibility that even extremely low levels of these compounds may be neurotoxic and, according to the researchers, justify restricting all smoking in indoor areas inhabited by children"
For some recent articles on this see below:
Read the articles below:
http://www.sciencedaily.com/releases/2008/12/081229105037...
http://www.nytimes.com/2009/01/03/health/research/03smoke...
Mention these articles as the authority and ask your MIL if she would work with you to keep her grandkids safe - if you can first tell her how much you want them to have a great relationship with them.