I try to defend the people she talks about and this makes her VERY mad. I am just trying to get her to see things with an open mind and open eyes.
I appreciate what your instinct might be in that situation, but I found that for me it's a lot more pleasant for everyone if I don't engage and don't waste my energy trying to get her to change what she thinks.
Think about it. She's entitled to her opinions, just like you are. No one really has any right to tell her to change what she thinks and feels. It's not your job to "fix" her to try to make her into what you believe is a better person. It's your job try to have a decent relationship with her, or, if that isn't possible, to protect yourself and get away from her.
With that being said, I understand how annoying it's got to be to listen to her putting people down all the time. But you can only control your reactions and behavior. You can communicate to her that you don't want to be part of that kind of conversation or spend time putting people down.
*Imaginary family gathering*
Mom: "Did you see Aunt Jenny's new boyfriend? What a greasy loser!
You: "I don't want to talk about Aunt Jenny's new boyfriend. Did you try the lasagna? It was amazing!"
Mom: <ignores your comment about the lasagna>. "What do you mean you don't want to talk about him? He looks like a jerk. And what's up with those ugly plaid pants? I can't believe she's bringing trash like that home."
You: "I don't want to talk about Aunt Jenny's new boyfriend. I'm going to go get another soda."
10 minutes later you run into her by the desserts...
Mom: "Apparently he's a plumber. Gross! And he laughs like a hyena"
You: "Like I said before, I don't want to talk about this. I'd love to visit with you if we can talk about something else. So, are you going to have the cake or the pie?"
Mom: "What? You're too good to talk to me?"
You: "I think I'm going to try the cake. I'll see you later Mom." Go hang out with someone else for the rest of the night.
It's not easy, and there may be some tension and a time when you guys don't hang out. But if you want a chance to change the script with her, you need to set boundaries and enforce them.
Good luck!