Ya know it wouldn't be a wedding if everything went according to plan and the families all got along lol! Your daughter is very lucky to have a mother who loves her so much. However, she will have to figure out how to deal with this woman's domineering personality sooner than later so it may be best to let her have some control and deal with the woman.
We have had similar issues in our married lives and basically it was tough because my mom was always doing and saying crazy things and my husband would become offended by her insanity. Likewise his mother would make me insane. We layed out a plan that basically was that I would deal with my parents and he was responsible for dealing with his. I didn't want his relationship with my parents to suffer because he felt it was his duty to protect and defend me and quite frankly he has a lot more patience with his mother than I do. My parents have a very high opinion of him and I don't want that to ever change, plus they know I am very capable of speaking my mind and no one is going to make me do something I don't want to do (stubborn as a mule). Its been eight years and 2 kids later. We're all still on speaking terms.
Without a doubt the woman needed a reality check and was out of line but unfortunately her son should have been the one to step up and say something to her. It is a shame that she was allowed to run rampant all over the kid's wedding plans. I think you were put in a very difficult situation by this woman and did what you felt was right at the moment. If nothing else you did show her you wouldn't allow anyone to push your daughter around. But I also agree with the other posters that these sorts of confrontations could create tensions down the road and perhaps a frank discussion with your daughter and future son in law may accomplish a lot. Just to discuss that they are each others number 1 priorities and that no one (even parents) should be allowed to come between them and ask how they intend to handle conflicts like this in the future, so that they make each other and their relationship stronger rather than weaker. Getting married is alot like having kids... the marriage license doesn't have an instruction manual.