In her case, I think its both real depression AND selfishness. You can be sick and still be a jerk. Or crippled and still be a nightmare of a person. A medical condition does not excuse everything.
OK...so what can be done to make things better? And maybe getting to the root of the depression may find the root of the jerkification.
She may not become good, but at least higher functioning for the sake of her kids. Also, your friend married her, so he saw something there (I think).