I would distance myself from this person as a friend. Her confession throws her entire friendship with you into question now that there is the question of her being friends with you just to be closer to your husband. As another poster said, friends don't hit on their friends husbands. DECENT women don't go after men who are taken! This shows a complete lack of class on her part.

Some women just don't understand that some guys out there will treat them well without wanting to get them into bed. They think that all kind behavior is an indication of deeper interest, even when it isn't. Sad, really.

As for the business end of things, keep things professional for the time being until you can separate from both this woman and her mother.