Re: In her clothes
Ms Hareem, I didnt read all of the responses here but my answer to your initial question is that I would surely do my best to please everyone. It would be a difficult situation if one lived with such a MIL and would be expected to wear her clothes every day....but assuming that the MIL lives separately, I'd be sure to wear her clothes and to make them every bit as attractive as possible. And then, once the evening is done, the dishes cleaned and put away, change into hubby's favorite outfit and have a nice time in our own separate space/room.
In the situation where you live with her, I guess the best thing to do is to wear her clothes sometimes and your own clothes sometimes. The dry cleaner is slow, or you're behind on laundry ... so you wear different clothes while waiting till her clothes are ready again.
Its always best to try to please everyone, to find a middle ground if its at all possible. And I think in this case, it is possible even though it might be somewhat annoying lol!!