The sooner the better. After finding out you're pregnant it's best to let her know because if you carry it on for too long then tell her, she'll feel that you had to keep a secret from her. I'm sure after she's all done over-reacting, she'll be fine to know that she'll be a grand-mother.
On the other hand. You could wait until your first trimester is over before telling her because miscarriage rates drop significantly.
For now take multivitamins and folic acid. Drop smoking and drinking if you do so, and no drugs. Be careful of what over-the-counter medicines you take too espcially aspirin because it thins out the blood and may cause a miscarriage. Tylenol is ok. Avoid anything raw, no soft cheeses, no honey..There's a list of things you can't eat and i'm sure you can find it on the net somewhere.