Look at it this way-you held your cool. Even though she was clearly trying to push your buttons you didn't budge. This is a very good thing!
I know you said you have a hard time saying no to her, but I think it is important to maybe go dim or even dark for a few days. Let her know that you will not tolerate being spoken to that way, especially in front of your kids.
"Everyone you meet has baggage. Find someone who loves you enough to help you unpack." ¤Formerly DelinquentGurl¤