Neighbors from hell, and I dont mean Idaho!!

Ok, long story. So back at Christmas Time, our next door neighbor's dog bite off the head of an other dog. So sad for them, but we had no beef with the people next door and their four big barking dogs. Whatever. Fastforward to Valentines day. Chad got me a cute little black puggle for valentines. The only problem is that she barks when she is outside to go to the bathroom. (she is an indoor dog however). Well about two weeks ago, I get a knock on my door at 7:30 in the morning mind you. It is our next door neighbor (with the killer dogs). They are upset that our dog barks when she is outside. I am not a delutional pet owner that thinks my pet is perfect. I feel bad that she barks, so I apologized and let her know that we are trying to train her. Well then she goes off on some kind of tantrum about how our dog doesn't deserve to live and that they have two hours of video of Radley barking and that they are going to turn us into animal control. Oh, and that Chad is "high and mighty" and thinks he is better then they are. (which if you know Chad you would know that that is just crazy talk). I cryed, called Chad at work, and he told me that he will talk to her husband when he got home from work. Well he did. He went over there and talked to the husband. It turns out that the husband is just as bazar and unhinged as his wife. Apperently we are all religous and poping out babies at our house. Which, I guess, has so much to do with our dog barking. He also reiterated that fact that our dog doesn't deserve to live. And why didn't we just take on of there dogs. (yep, certifiable) We decided just to be civil. You know, wave when they drive by and smile at them when we go on walks. After all, they are our next door neigbors. (PS, they are in a law suit right now with the neighbor whose little dog got decapatated by their dog. They are just making friends with all the neighborhood!). Well a couple of days ago, the wife came pounding on my door again. I almost didn't answer it, but I thought-why not. We have been working with Radley and she is not as bad as she use to be. So I opened the door. Sure enough, the chick was ready for a fight. She let me know that I better get my dog inside because she is poking her head underneith there fence and she is going to get her head bite off if we don't get her. Although she said it not so nice, I smiled, apologized and let her know that I would get my dog (who was only out side for maybe 3 min. I just barley let her out.) Then she let me know that she has got that on tape. Which makes me mad. This is the second time that she mentioned that they are taping us. I truely feel violated. Like I am not safe to go out in my back yard. So I told her to stop. She said they would when our dog stops being the piece of S___ that it is. So I shut the door on her. We have only had Radley for a little over a month and they are giving us this much crap. She is only a small puppy. I know that puppys can be annoying, but not with standing, she is still a good dog. Any advice on how to deal, I could use it. Now I know why the commandment to love thy neighbor could be one of the hardest!