How am I supposed to deal with my husbands sister and husband?

I got married about 2 months ago. Prior to that, my husbands sister exclaimed that she would not be attending our wedding because my husband refused to apologize for some off handed comment that he made to her. She told him that unless he got on his hands and knees and begged her forgivness, she would not be coming. Needless to say he told her that he was not going to do that, and we accepted the fact that she would not be attending. Unfortuantly my husband had asked her husband to be a groomsman a year before the wedding. he got measured for a tux, threw him a bachelor party and then four days before the wedding, told us that he "had to support the wishes of his wife" and would not be attending, nor would their daughter who was slated to be the flower girl. Needless to say I was very upset at this, I had to redo all the programs and find a replacement. Im not suprised however, as Ive always found him to be somewhat spineless and lacking character. My husbands parents were very upset and embarrased at their daughters behavior. Before the wedding, they asked her to please reconsider, for their sake and family that would be traveling to Ohio to attend. She basically flipped out and has now cut them out of her life as well as her 3 childrens. My husband and I feel that she is mentally unbalanced and the reaction to the comment that has spiraled out of control is unbelivable (the comment was "you really crack the whip on Dave don't you"-This was after she would not allow her husband to accompany him to a football game) Granted my husband has known her for 32 years and should know how she reacts to even the slightest thing, but It really was'nt that bad- In my opinion. What I guess I am asking is that I have avoided going to the grocery store when I have seen their van in the parking lot. Their poor kids have seen me walking the dog and its obvious she has told them that they are not allowed to talk to me or my husband. I cannot avoid running into them. And this is not the first time she has cut her parents out, so likely she will come around and Holidays are going to be a MESS. Should I just ignore her like she isn't there, or what? My husband says that he does not think he will ever be able to forgive her or her husband for the stress they put us through, so attempting to reconcile is probably out, but anything along that line is totally up to my husband in my opinion because it is his family. Im seriously considering moving to another town, which sound ridiculous- but she is the only family for both of us that lives near by and my husband would rather be around my extended family than his sister.