That's really tough. Has she always been like this with you? How does she relate to your dc's? Do you see anything similar going on between your mom and them?
She's your mom...take her aside as say "Mom, I'm not sure if your aware of this but you are being [fill in blank] and it's becoming very stressful for me. Can we just talk like two adults instead?" And be prepared for nothing to change. But at least you let her know how you are feeling.
I grew up without my paternal grandparents because of a falling out between them & my parents. It, of course was nothing serious, just two sets of people who refused to bend. My siblings and I missed out on a lot not growing up and knowing them. I regret not knowing them to this day. I said this to say that if at all possible, try to suck it up, smile, be patient and let your kids get to know your parents. Even if it's hard for you - your children will reap the benefits. (this is only if she is not as nitpicking w/them as she is with you...since they are having a blast, it doesn't sound as if she is.)
I hope it gets better from here! :grouphug: