D.B.
Your only option is to display complete professionalism. That means you ask only professional and legal questions, you figure out some strategies to counter any inappropriate comments this candidate makes (including deflecting things that are too personal or relate to her relationship with the boss), and you completely leave your feelings out of it. If you need help with questions, you can google a number of HR related sites. Things about how she would increase the productivity or profitability, for example, would be very germane. Also ask about challenges she may have had on previous jobs, how she handled them, something she failed at and what she learned from it, etc. You can also ask for references from the company across the hall and the current company.
The boss is not just giving her the job, the boss is insisting on interviewing a number of candidates and having you involved. That's the good news. Maybe the boss doesn't feel she can say no to this candidate directly, but is putting her through the interview process. I also wonder why the woman is taking a pay cut to work with you - perhaps her antics have not helped her in her current job and she's on the outs there?
Your problem with her is that she is not professional on the job. Your only choice is to be completely professional in the face of this behavior, and, if necessary, to make known your concerns to your boss. It's a balancing act to do that without getting personal and being a part of the drama you don't want brought into your company. I don't think you can tell your boss this ahead of time. You have to up your game, have top-notch interview questions delivered with a dispassionate tone, and go from there.