How can I divorce a melodramatic friend with out all of the drama?

Sorry in advance for the very long post...
I have this friend. She's been my "friend" since I was seven years old. She has not always been a great friend. When we were in 6th grade, she couldn't figure out how to be friends with me and the new girl who lived in a big house and had all of the cool things. In 8th grade, she was really pissed at me because the boy that she liked, like me instead of her. In 10th grade, she dated some really weird, drug abusing boys and became a very insecure girl who needed to be reassured alot, and was not sure about who she was. As a result, she was a high maintenance friend. Then in college, she was a boy crazy friend. Once when I was visiting her for a cheer me up after a bad break up with a bad boy who I thought I might marry visit, she ditched me in her dorm room and then at a couples party where I was the only one who didn't have a date. She never even considered my feelings, and never apologized.
Then came the after college days. I started dating my husband, and she was in awe that I was dating one of the "cool" guys from her high school. She was very judgemental, and never saw him for the guy that he was, just saw him for the guy from the wild, crazy, cool group in high school. She even dated one of his friends for awhile, but in the end, that didn't work because she was too busy criticizing him for what he was in high school and how he was going to college later than everyone else had. (god forbid someone decide to do something good and change for the better). Well, the jokes on her with that one because he is a very successful writer for a very funny T.V. show that is up for some awards this year.
Sorry to digress... I got engaged, and she was my maid of honor. On the day of my wedding, her hair did not turn out as she liked, she complained, didn't show up in time to help me with my makeup (probably a good thing...she's sometimes been the topic of too much make up gone bad), and my other bridesmaid's had to remind her that I was the bride.
A few months later, she got engaged to a boy that she had verbally expressed to me might not be good enough for her. After her marriage, she made comments about past boyfriends (the one mentioned above included) and how maybe she'd made the wrong choice because those others had more money, bigger houses, jobs that made them famous or popular. Are you sensing the theme here? She likes to be apart of the cool, popular, wealthy group, no matter what the costs.
I think it was around this time that we had our first real "I'm done with you and your selfish ways" conversation. She was being melodramatic over some cheesy fries that were placed in front of her during the season of lent (did I mention she'sNOT of the Catholic religion). I sarcasticly told her to get over it, and within a few minutes she was sitting beside me telling me that I was just kidding when I'd said that. Call it the stick that broke the camels back, but I snapped and told her that I wasn't kidding and that her melodramatic and selfish antics were getting on my nerves and she was a highly irritating person in my life. She had a fit and stormed out of that dining establishment in a fine melodramatic manner complete with throwing napkins. Well, my guilty conscience got the best of me and we ended up being friends again.
The next big argument happened when I didn't tell her I was pregnant early enough. I told her right after 12 weeks, when I told my extended family. But for the next 2 years all I heard about was that I hadn't told her and how I was so bad for not telling her. When I was about 8 months pregnant, she announced that she was pregnant on the day she found out, and again brought it to my attention that she was a better friend for confiding in me so early on.
So our 1st born children are 6 months apart. They play together, and sometimes enjoy each other. Her little boy is a bit of a behavior problem at times, and he lacks the self control that most children have at his age. But, that's a whole other story, the parenting of that household and all of it's disfuction is something I will save for another post one day when I need to vent again.
There have been some ups and downs, and jealousy about new friendships made in the past 5 years. And I have just ignored it, or been very annoyed by it and complained to my true friend, LT, and gotten over it. I've also distanced myself so that I don't have to deal with her on a daily basis. In the few months, she has added another child to her family after a long stay of bedrest. And when that second dear child arrived, her first born became chopped meat.
On one occasion, we were dining at their home, and their little guy was out of control. My sweet girl was playing with him, having fun, but not out of control. That's when the father of this boy snapped. He yelled at his son, and then turned to my sweet girl and said, "And that goes for you too!" My sweet girl was so upset, I summoned her to me and told her out loud for everyone to hear that she hadn't done anything to deserve being yelled at, and that her buddy's daddy had lost his patience. In his defense, he felt badly, not sure if he thought he was wrong, or was feeling guilty because he thought I was really pissed off at him. He said he was sorry to me, and I redirected him to apologize to her, and stated, that she gets yelled at when she's in trouble and has done something really wrong, but her daddy never yells, and she never gets yelled at in that irrate of a tone. Everything ended up fine that night, sweet girl recovered, and I forgave, but didn't forget. I never heard anything from my "friend" on the subject. And that bothered me because if the tables would have been turned, I definitely would have expressed some sorrow for my husband's behavior to her.
Their family endured a big flood in their home where they had to live outside of their home with friends. But, the weird part was only the new baby, mommy, and daddy stayed with the friends. Their little boy was summoned to his grandma's house for the evenings, and to any camp that they could find for him for the morning hours every week during the summer when his mommy was at home on maternity leave. Not to my surprise, he started behaving in a less than stellar way, the way any pissed off, left out, needing attention little boy would. I tried to include him in some of our fun outings, and he was well behaved, until his mother walked in the door. I have tried to remain supportive and helpful during their time of need, even when I don't agree with what they are doing, I just try to tell myself that everyone's different, and they are not wrong just because they don't do something the way I would.
Well, yesterday, something happened that may have changed my mind about everyone being different. We were at the pool, and having a nice time making forts with the pool chairs, then the pool manager told the kids that they couldn't put the chairs on their sides because it scratched the furniture. Sweet girl was disappointed, but fine with the idea that they could just use their towels and keep the chairs upright and make a different type of fort. Well, my friend's little boy freaked out, started howling, hitting his mommy and throwing an all out fit, complete with growling and devil sounding speech. She reacted by telling him to stop, then pulling his hair and telling him in an evil voice that they were leaving. I tried to help diffuse the situation (the teacher in me came out) by explaining to him that they could still build forts, but they had to take special care of the furniture. Then I said, "It's not your mommy's fault buddy-"To which he interrupted and told me," Don't talk to me, don't speak to me, I don't want to hear what you are saying to me." He had a very evil voice and look on his face, the kind that some say could kill. I replied," No problem, I don't want to talk to you anymore, I don't want to talk to someone who is talking to me in a mean, rude way. We'll see you later." And we finished packing up our things and started our walk home. I said bye to my friend and we left. Is it unrealistic of me to think that she might have called and apologized for her son's behavior?
I have been reading a book that talks about getting rid of the things that cause you the type of unhappiness and frustration that is not necessary. I think this friendship is one of those things. So in the next few weeks, I will not be available for that friend, and I am planning to do a lot of avoiding. I know that's the chicken way out, but if you had been there for round one, you would understand that it would not be pretty if I tried to discuss this with her and told her that I think our friendship would be better as a distant one. So, I'll try to create and stick to the distant friendship that I am comfortable with...