Eek... as aggravating as it is, I think you need to take her aside and have a chat with her outside the room, without the dogs. I would also, again, explain to your boss and your instructor that this lady is putting a slight damper at your agility classes.

If this woman was in our flyball club, she would be kicked off of the team. We don't have a problem letting dogs with behavioural problems join the team, but if the owner does not take control and allow the rude behaviour to go on, it's not fair to the rest of the team and it can become a nuisance.

Good luck!