hi melissa,
i think you are already on the right track...(scaling down their playtime). if you enjoy her company, you can always get together without the kids for girls night or for lunch while they are in preschool, if they go..one thing i learned from my first child was that while you generally pick their friends when they are small, they will eventually (usually if it's girl/boy friends) outgrow wanting to play with each other, as they develop different interests. we used to have a playgroup with a few girls and boys, and as they got older, he only wanted to go if the other boys were going to be there. he is eleven now, and we still see boys we met in gymboree when he was one...but none of the girls. anyway, if you aren't comfortable telling her about the problem (it might not make a difference, she may get defensive) ...then i think you should just do what you're doing...and remind your daughter, (in front of the friend if you can) that "that's not nice, and we don't treat our friends that way...or tell him...(if you're good friends with her, she may not mind you disciplining him..maybe she feels that you'd speak up if you thought he was out of line...?) when he does something to upset your daughter, address him yourself..."please don't ...it isn't nice...you wouldn't like it if she did that to you"...anyway, i think i'm rambling, but you get the message..any of my close friends don't care who sets the kids straight if there's an issue...whichever adult is there is usually the one to do the talking...good luck!