Hi Josie!

Have a look around the research/media forum here and also on the first page when you sign in; there's lots of information on low carb and health, but there have been no long-term studies to date that show whether low carbing over a long period of time is healthy or not, although there have been a couple of 6 month studies published recently that show low carbing produced improvement in nearly every measurable aspect and a long term study is about to begin. Print whatever you find helpful and hand them to your mother-in-law to read the next time she starts in on you about how unhealthy this is. What she is doing is simply repeating the low fat dogma that she has been fed (and believed) for the past 20 or so years. There are whole cultures that have traditionally thrived on a high fat/protein low carb diet (the Inuits, for example), so I base long term low carb effects on that. Personally, I've been doing this for 18 months with nothing but improvement in my health and there are others here who have been low carbing for a lot longer than that. There's also Dr. Atkins himself who has been following a low carb plan for at least a couple of decades and Dr. Robert Bernstein who has been low carbing for 40+ years to control his diabetes; I'd wager his health is far better than most juvenile diabetics his age (if they even survive to his age). There's also Dr. Schwarzbein, Drs Dan and Mary Eades and Barry Sears...all doctors who agree that cutting carbs is what we need to do, not cutting fat.
As far as your weight goes, your own physician would have to assess that and determine if you really need to lose more weight or if toning up and adding more muscle would do just as good a job. Either way, adding more muscle can only benefit you in the long run. HTH