Oh man, she sounds like my mom. She thinks we should invite ALL of her friends, family, and people she has met once walking down the street. The edge I have on her is that I'm paying for the wedding and she's not. So I remind her whose wedding it is and that she's not paying for it, and I do things my way. We were able to compromise anyway (she couldn't invite all of her friends, but we allowed her a bigger portion of guests to invite (my in-laws get 100, me and my fiance get 100, and she gets 150. It worked out nicely. If anything, find someone who can come to terms with her and remind her that the wedding is about you and your fiance, not her. Hopefully you can work something out.

Also, since the groom's family is in charge of the rehearsal dinner, you could compromise with her on that. Let her go all out with the dinner and invite whoever she wants, and you can control the wedding/reception.