I guess if my MIL acted like the woman on Bacherlorette last night, I'd want to call her Mrs. even if she wanted me to call her Mom - just to maintain some distance! It' not necessarily what the woman wanted to be called - it could be what DIL feels more comfortable calling her.
Seriously, I don't use any name, I just say what I want without using any name (which is harder than it sounds!). 
GOOD ONE