That is really heartbreaking!
I think that in your situation, I'd be tempted to try and share some parenting advice with her. If she takes it the wrong way then you lose nothing since the other alternative is ending the friendship anyways. If there is even a SMALL chance you could plant a seed in her heart in the hopes that she might someday remember it and treat her children as the gifts they really are, then there is nothing to lose! As far as going to her house goes, I think it is wise to stay away so as not to expose your children to that kind of environment.