I totally agree with Mitzi? I think that is the name, I'm sorry if I mispelled it.
I would just like to add a few things. My advice, which I have seen this time and time again.... Consistency. No matter where you are, what you are doing, there has to be consistency in consequences for poor behavior. IMO there is no bad behavior, just poor choices. If you as a parent are not consistent, then there are no consequences really.
There is nothing wrong with feeling a bit guilty, but using that as an excuse for not disciplining poor choices, is only going to cause the opposite reaction. The child will take advantage of every situation.
My mother once told me that children, while in their room are making virtual t-shirts with all of our buttons on them. They know exactly which ones to push and when. My children are 30, 23 and 19. They still push the right buttons, when they need to. But on the other hand, they know what they can get away with me, and what they can't. They still get disciplined, when they are out of line, it is just age appropriate now. :)
This is a tough position to be in. I do sympathize with her. Invite her here, and if she is still having problems, perhaps we can help her further.