As a parent, i've said things to other kids that are obviouly not being supervised by their own parents and are hurting others. However, i speak nicely and simply tell them in a calm voice to please stop or i will get "so and so"-whoever is in charge, so as to not be intimidating or rude. But it sounds like you were supervising your child, and this woman "blew up". What she did, in fact, was bully you. There are anti-bullying laws and regualtions you should look into for your state/city/school district. Since the fact that she took it a step further than most hotheads and threatened you too, I would make the school interven and do something to protect your safety while you are at school with your child.

I would be concerned about all the kids at the school if this woman behaves that way towards one, who's to say she won't behave that way again...and it sounds like she needs some anger management. My child's school has a school psychologist, and social worker; if your school has that i would involve the tell the social worker becasue this woman's child may need some help if she does have anger issues.