Newborn babies look pretty fragile. If you're new to this whole parenting deal, it can be scary to manhandle your baby. And by manhandle, I mean things like picking him up, changing him and rocking him.
The good news is that while babies look fragile, they're really not so breakable. Most babies, barring health issues, are sturdy little creatures. If you support your baby's head, you'll be just fine; even if you're a little shaky and nervous at first. Trust me; my son's dad had never held a baby in his life before his son arrived and he zoomed to baby handling pro in under a month.
Baby holding is a fast learning curve. Pretty soon you'll be tossing that baby over your shoulder like he's always been there.
Tell your mother-in-law where to stick it. OK, maybe don't tell her, but ignore her when she says, "Oh my God, you handle that baby ALL WRONG!" I swear if I had a dollar for every pal I've had who has had her MIL tell her this, well, let's say I'd be pretty rich.
Just to be fair, I've heard other people criticize baby holds as well; from mothers-in-law, to moms, to the neighbor next door, to perfect strangers on the street. Ignore them. All parents hold babies differently at times and babies have personal hold preferences as well, so if someone tells you that you're doing it wrong, smile, nod and ignore. You'll find your own way, and it will be perfect for your baby and you.