My daughter is Type I diabetic and the thing she really needs to avoid is too many carbs; particularly the ones that area really quickly digested like sugar, white flour, white rice, potatoes, etc. Mexican food should be good. Beans, corn tortillas, cheese, and veggies are great for her to have. If you are unsure about carbohydrate content look at the package of the product or look up the nutrition information at www.nutritiondata.com. If your mother in law is Type II diabetic she is also probably on a low meat, low fat diet as well. There are a ton of great resources online and a vegetarian diet is actually great for a diabetic. Vegetables do not have many, if any, carbs so load up on those. Have side dishes of salads, artichokes, mashed yams, fresh cucumbers avocados, and carrot sticks. Consider a meal of bean soup or vegetarian chili. A stir fry with brown rice is also a great option. All of these will be really great for her and your family. Other great foods are whole grains (sparingly), beans, eggs, and dairy. I am sure if you Google it you can find a ton of diabetic friendly vegetarian meals. Another great resource is the book "Dr. Bernstein's Diabetic Diet". You can probably get it at your library. It has a lot of recipes with meat in them, but it will give you a good idea of how to cook. Good luck and kudos to you for being so sensitive and accommodating to your mother-in-law. It will be a big adjustment to her for a while.
One more note, it would be best not to eat out. She needs to be aware of how many carbs she is eating and it is very, very difficult to figure that out at a restaurant when you are a new diabetic. We had to get into the habit of measuring everything so it will probably be helpful to cook the carbs so they can be easily measured.
I don't want to get long winded, so feel free to contact me if you want any more information.