We're buying MIL the latest Bryce Courtenay and for my mum and dad we've done a photo collage of all their grandkids which has turned out really well.
Does she have a preferred author?
What about a photoframe (either a plain on or a cute one from baby factory and farmers etc that say "I love grandma" or similar) and pop a scan picture in it, which she can replace with a pic of the baby once it arrives.
Pot plants, a 2009 diary/calendar, a gardening book (assuming she likes gardening).