Do you feel she is good for your child, or do you think that she has some other problems that you don't want your child exposed to. You have to consider all the issues involved. If she is telling your child yes, to things you say no to, that is over stepping her grounds. You are the boss when it comes to your kids. Be firm with things like that. If she is doing anything wrong, let her know.
I would think that there is something else you don't like, other then her being motherly over your child. I was also wondering how old your child is? You mentioned that she longs to have another baby. Perhaps you should recommend adoption to her. If your child is just a baby, that is kind of young to be sending him away once a week. Just my opinion, but it doesnt sound like you like it either. You guys don't like it, so don't do it. Just tell her that you miss him too much when he's gone all night. You don't want to make trouble, I am sure, so just tell her it's you, not her. Keep it simple as to not hurt her feelings. She had her time as a mother, now it's your turn. Don't let her take it from you. They grow up much too quickly.