willow - my mum did FDC long term - and would transport the kidlets to whichever programs the parents asked of her. it wasn't unusual for her to have a few different places to go each day - but she basically did as the parents asked. i'm sure there are a lot of other FDC carers around like that... even now, i remain friends with many of the children (not that they're kids anymore) that mum looked after as we developed a strong bond with them - they effectively became one of the family (and remain so today!)

FWIW - i think your MIL sounds like the ideal carer if she is prepared to stick to your rules regarding your children. i think sometimes it's harder to put your foot down to family about what it is you're wanting and expecting, and what the consequences will be (ie, she'll no longer be able to look after the kids if you can't trust her).

from a financial perspective - work out what it would cost you at a long day care centre - chop that in half - that's the MOST you'd pay for care (less if you are entitled to a CCB payment). negotiate with that as your maximum amount. i think the amount you're offering is plenty generous for your MIL looking after your children.