Mrs. Katz, I feel that the question is far more than what kibud Ov Ve’aim includes, or paper plates and shabbos shoes.
You mentioned that you had a trying time over yom tov, so I assume that more than these three trivial issues were “at stake”, especially since you mention that she told your children about the shoes rather than yourself.
It sounds to me that your mother in law has a rather meddling personality, if she involved herself in how you spend your money, and she obviously does not understand limits if she crititized you to your children.
If you only see her from yom tov to yom tov, than the best idea is probably to give in, it simply is not worth the fight with these sort of people. [you could potentially buy your children shabbos shoes, and just let them wear their weekday shoes when they meet your mother in law].
If however you meet her regularly, it is probably not such a good idea to give in, because you are empowering her. Today it is shoes and plates, tomorrow she will suggest that you should not send your sons or daughters to learn in eretz Yisroel, and the next day she will tell you not to take an eidim/mechutan who wears a bekeshe/frak, etc…
It is important for you to realise that she needs help, and if you have her on your head regularly, it may be worthwhile talking to a rov who knows both of you and seeing if there is anything that you can do. It can be very very dangerous to have a controlling personality around.
You have missed out a very important part of the question, which is how your husband fits in with all of this.
If your husband wants to listen to his mother, then it is your job as his wife to obey HIS wishes in these particular areas, i.e. to stop using paper plates, but it is important for you to make sure he realises that it is not a good idea to give a meddling person too much control. again, you might be better off speaking to soemone who knows both of you to discuss things with him.
Hatzlocho Rabbo.