Sometimes there's not much difference? She may not know when she's crossing the line and others may not care and just call it all "lying."

I wouldn't worry about her behavior as much as my own; I'd state things when talking to her based on what I knew as truth. It doesn't matter what she is "trying to do" with her lies, that's up to her. I'd just make sure I was straight with who I am and what I want and say. If her husband is "protecting" her, that means he's "accepting" and being manipulated in some way by her and that's what she wants. There's nothing one can do about that. If behavior is rewarded in the way we want, it's almost impossible to change, even if we want to change it? Lying can become a habit, almost an "addiction" and if there are no negative consequences, then it's not going to change because your friend is not going to want to change it enough.

I would not worry so much about hurting someone else who is hurting you; especially if she is getting away with it. Always state your own truth, but only when she's talking directly with you; not your problem when she's talking with someone else. Other people's lives, health and happiness rely on us being who we are and stating our truths. We are "mirrors" for them so they can see themselves better. It's not one person's job to change another person's behavior but it is the first person's to reflect how another's behavior comes accross and affects them.