Hi, guest--
I have been victims of these types, too. One job I had was utterly ruined because of them and I stayed bruised and confused about myself for a year or so afterwards. It was awful.
My profession is littered with people with major personality disorders, especially NPD. To keep from being run over by their steamrollers I've developed some skills/rules of the road to help. I still get waylayed sometimes (and did recently) but I get what I want more often (and in fact won a recent long-term skirmish with these people, thanks to the help of this board). In fact, I win most work battles these days, because these guys are so predictable.
So, take or leave at your leisure, but here are the tips:
1. Act so friggin' happy around this person that it's like you are on acid. To help with this, talk to everyone around you when she's around (everyone nice) including children, the friendly custodian, the gerbil in the cage, whoever. Smile so much that your mouth hurts. Laugh out loud. For some reason, nothing unnerves NPD and especially borderlines like someone else's happiness. They want to be around someone who gets upset by them and is rattled by them. I have found that laughter is to these people like garlic to warewolves-- it's amazing.
2. Spend as much energy as possible with people who a. are nice to you, and b. agree with you on things, especially (if possible) about her. You feel as if everyone agrees with her. No way. Not possible. There are lots of folks who think she is a nut. Find them. Or at least focus your energy on other people besides her and her circle. Do this at the school when you go there. Drop in on a friend before visiting bitch-lady (my name for her). Let bitch-lady see you talking happily to her colleague. If you don't have friends there, cultivate them-- one of your children's teachers must be nice and compatible with you, or (better!) the principal. That would be priceless.
3. When she confronts you or tries to get you rattled, look her straight in the eye and say something plain and declarative like "I do not agree" or "I will not be doing that" or "Please don't raise your voice at me; I don't like it." Or, "I will assume you will never take these feelings out on the children." Then smile. But hold her gaze a second or two more than is comfortable. Usually one of those does the trick. If you are too nervous to speak, just do the gaze thing. Think thoughts to yourself like: "I am on to you" and "you think you rattle me, bitch?" This will give your eyes the proper fury

But do it with a pleasant face, kind of like "how amusing that you think I will stand for this!"
4. If you have the stomach for it, scheme a little bit against her. This is more advanced stuff

. And only do it to get something you want, not to hurt her (the point is you don't care about her. She's mean.) But if she knows that people in charge of her or that she cares about are not amused by her treatment of you, or that they support you, then she will cut it out. This might be something for later, after you have made best friends with the principal... Oddly enough, when she is tamed, she will probably be nice to you again and you can enjoy her (in very very small doses).
Sorry you have to deal with this! But one thing I have realized is that it is endemic to your culture, or maybe to life. You can't move away and go somewhere where it isn't there. These people are everywhere. And you are so much smarter and more well-adjusted than she is-- you can get to a place where she isn't as much of a threat.
take of leave this at will, of course. It's just stuff I learned. I may write a book....