As a midwife I have seen many different support people at a birth and sometimes great numbers of support people, I agree With Kelley if you feel uncomfortable at all with your FIL at the birth it can make the whole labour become quite hard to deal with as you do not open up your mind because you are worried about him seeing the business end of things, most women I have cared for usually have the father or inlaw in the room why they are labouring but if they need any thing like vaginal examinations or it is time to birth their baby the father or in law waits in the waiting room and comes back in when the baby is born.
Ultimately it is your body and your birth, so if you dont feel comfortable, dont do it, you dont need to please any one but yourself