Mother-in-Law forcing my husband for divorce- what can we do?

Dear Sir/Madam, I've been married for the last 3 years [Date: April 30, 2011]. A couple of months into the marriage, my Mother-in-law, started pressurizing my husband to divorce me as in her words -'I am of no value or use to them'. Ours was an arranged love marriage, my husband and I met at work place. Before or during the marriage arrangements, no demands for dowry was made and my husband's family made a point of saying they dont take dowry. My MIL is a widow, her husband passed away in Jan 2010. She has only one son. 2-3 months into the marriage, she started accusing me of using 'magic' and other wiles to lure away her only son from taking care of his widowed mother. Some of her accusations are that I am not physically attractive, I am from a different part of Kerala[which is a bad thing apparently!] and that I didn't bring any money or gold like other people she knows. I have tried my best to make amends and concede whatever she wants. But her true and constant demand is to 'free her son' so she can be his sole beneficiary. She also tries to exploit my husband's belief saying that according the astrologers she consulted, I have a special 'yoga' in my horoscope which will lead to my husband's destruction. She has also accused me of bad morals and has slandered my reputation amongst her family. She has also spread a rumor that me[ an IT employee] and my mother[ a retired govt teacher] are black magic witches who is controlling her son by use of evil. She consistently claims she can find my husband a better, more beautiful and 'well-endowed' wife. So far, my husband has been supportive of me but I am very worried that if this keeps on, my marriage will be in danger, as he also believes in astrology and she is using that to her benefit. My MIL has no job, but she has considerable assets and she also keeps control of all the money that her husband left for her and my husband. My husband also provides her a monthly family maintenance amount. What can I do to stop my MIL from her constant mental harassment? People have advised me to file a case for dowry harassment but I don't want to drag my husband or his family to court, unless I have no other means.