Okay, I have got the answer.
Going clockwise: O,M,L,V,W,N,U,T
First we deduce the family tree. From the statements, O and U are married. L and N are their sons. V is the daughter of L and T is the son of N. M is the wife of N and W is the wife of L.
Now, their positions:
First, we put O at any arbitrary position in a circle.(Draw a circle and mark 8 points equidistant) Note that We can place O at any arbitrary position because circles can be rotated and hence, it would make no difference to the final answer. However, had it been a straight line, The initial positions of O and U would matter. Place U such that O is two positions to the left of U.
Now comes the hard part. From the given statements, we can place L at 3 positions only(directly opposite to O, directly Opposite to U, to the immediate right of U). We can see easily that if we place L For "next to U", there is no position for N to be placed.Similarly, directly Opposite to O is also ruled out. Hence, only place is "Directly Opposite to U" for L.
Place N now. Similarly there are 4 places for N. (To the immediate right of L, to the immediate left of L, Opposite to O, immediate right of U.) It can't be to the right of L, since then, it would be between L and O. But, it has to be immediately next to W(Sister-in-Law). The V statement rules out two of the other options. Hence, N is seated to the immediate right of U.
V is now placed. It is placed to the right of L, two places away from N as given. W is placed in between V and N since she is the immediate neighbour of N. M is the last one remaining and is thus placed between O and L.
Here's a picture of the arrangement: