Courtney - I would tell the girl, fine, eat the money for the dress. It's not like you're going to remain friends after this anyway, so what are you losing? You know how much the dress costs, and frankly, paying for it at all is way more than most people would do, so I would tell her to take a flying leap.
As far as MIL's, my exmoron's mother was a nightmare. It would take me DAYS to tell you all the crap she pulled, but two of the highlights are - When we first met, she took me aside for some girl time, pretending to be al friendly, then said "Don't get your hopes up dear, there are so many girls out there, how can you hope to hold onto him?" Well she was right there. After we got married he slept with anything in a skirt. The second was when I was pregnant with Rhiannon and she came over to ask me to prove that it was his and not someone I'd met in a bar.
There is soooo much more, but some I can't post in open forum. So Courtney, trust me when I say, if that's how his mom is, it's just not worth the rest of your life being in turmoil. It almost always comes down to the same thing; either Adam will choose his mom over you, or he'll end up cutting off all communication his mom, but trust me, his mom will never change.