is it rude to start speaking another language in mixed company?

It is rude. It is the same as if they are whispering into each other's ear right in front of you.

Same situation - different spin:

My family grew up in Phoenix, Arizona. My parents were both fluent in Spanish.

As a child, my sister and I were looked after by a nanny/housekeeper/cook

who did Not speak Spanish. In deference to her, my parents rarely spoke Spanish

in the home until we kids had gone to sleep. Subsequently, my sister and I Never

learned to speak this language which is a Very Useful Commodity in the American

southwest. Though I completely understand their reasoning, I will forever regret

this horrible, wasted opportunity.

I used to be very adamant that it was rude, but now I think it depends. I live in an area where there are a lot of people who speak Spanish. One of my best friends has been living in the US for 10 years and could be considered fluent in English, but there are still concepts that are very difficult for her to explain in English. She finds it easier to explain in Spanish. I have students who are the same way--were born in the US and have spoken English their whole lives, but speak Spanish at home. And some of them have to answer questions in Spanish to be able to get their points across or to get their thoughts out. That might have been the case with your in-laws. I do, however, think it was rude that they didn't have someone at least explain what was going on to you guys.

Dont take it to heart :-) I know lots if people who speak English and add their mother Tongue in the sentence....I think it's funny my mum is german speaks English and learning Spanish I speak English and a little Spanish and german and I know when I lived in Spain I'd start swapping around from English to german etc. I don't think she means it it's a habbit cos you don't understand it you think she's speaking badly or you feel left out. Next time she does it smile and say what did you say??

It is proper etiquette i think to speak the language everyone else does if possible, but i do not think violating this is rude at all. Many people i know do think it is rude though, i am not saying i do it to them, i am just saying if it happens when i am around then i will not think twice about it.

yes, it alienates the other participants in the conversation who don't speak spanish. I think it's quite rude, UNLESS you're acting as a translator

Doesn't seem rude to me - but then Im from Australia which is very multi-cultural and we have many languages spoken all around.

one should speak the language of the majority(of where you are at the minute) if you know how to.