Something about this guy who wants to hire you worries me. I am not there so if your feelings are telling you otherwise by all means listen to your gut. But just be careful with everyone involved -- friends, coworkers, the guy wanting to hire you (he could be manipulating the situation to make you want to come work for him).
I really think that everyone is just looking out for their own interests. I have been hurt by coworkers many times in the past. There are people you can work with but really don't like -- then there are the people you really like but you don't want to work with. Maybe your friend really does like you but she just feels that you conflict too much when you work together. Not that that should make you feel any better! Maybe she doesn't want to work for you because she it would strain your friendship if you were her boss. I would just leave your personal life seperate from the business life.
I work with a guy who I would adopt as my father if I could -- he's just so sweet and I love him to death. But bless his heart -- he is a pain in the @$$ to work with because he doesn't understand accounting so he doesn't understand how I fix his mistakes. He always thinks I'm doing the wrong thing but I'm the one with the job and I know what I'm doing. We get in arguments sometimes over it -- But I still love to eat lunch with the old man and think he's just precious... Maybe its a similar situation with your friend.