I must be in the minority because I like having my kids pictures taken. I get them taken individually at birth, 3, 6, 9, 12 and 18 months and then on their birthday after that. I get them taken together at Christmas or Easter. I only ever get the package that they offer though (JC Penny's 7.99 or Olan Mills 9.99) so it doesn't get too expensive. I recently found Portrait Innovations through a friend and they have an awesome package deal that gives you more than one 8 by 10 if they are around you. The photographers are really nice/kid friendly, you get your pics right away so you save money and time by not having to go back and they don't push you to buy more than their special package. They have an awesome package for $10 with more than 40 pictures (2 are 8 by 10's). They have great CS also - I got my son's first birthday pictures last week for free because they messed up on my appointment time and I had to wait a little bit.

Here's their website:
Portrait Innovations - Home

Here's their special offer:
Portrait Innovations - Special Offers

Here's their location link:
Portrait Innovations - Find A Location

That being said, I've never given grandparents any pictures bigger than a 5 by 7 and they've never asked. I don't know what I would do if they asked for something else. I guess I would just explain your reasoning to her or if you give her a gift for Mother's Day, (or her birthday is close by) give her the 8 by 10 in a frame as her gift.

I would say too that it would be nice just to take a special pic of her yourself and have it blown up to an 8 X 10. It doesnt cost much that way. Or take a pic of her with Grandma and have that blown up. I do like the professsional ones but I find the ones I take more appealing sometimes.

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We got it taken when she was one month old... and only then because I didn't have the money to get the hospital pictures. I am more in favor of family pictures. We havn't done those yet but we plan to soon, I hope.
We take a lot of pictures on the digital camera and stage them with pretty blankets or Christmas presents and the tree. They turn out really nice and she is always happy because she is at home and we can quit whenever she quits smiling.