Help! Leave comments please. What would you do?

As I sat in Starbucks today, waiting to wish Amber's fiance "Happy Birthday", I suddenly realized that the people one table over were feircely involved in gossiping about someone. My ears tingled when I heard names and situations that I recognized all too well. The subject of the gossip and conjecture happens to be a very close friend of mine, and the woman doing the gossiping is supposedly a good and long-time friend of theirs. I turned around and confronted the big mouth, who immediately denied that she was talking about the same person, and then went silent for several minutes when I turned away. The problem is, the gossiper is now also a huge LIAR, because there is no way that she was talking about anyone else, other than my friend. The gossiper named names and places. And I recognize her from parties and art openings, though she did not recognize me (must have been the furry hat).

So what I need help with is, what do I do now? I was furious and shaking at the time, and all I could do was indignantly stare this woman down as she left Starbucks. Now I want to know, do I tell my friend about this incident? Would you want to know, or would it be too hurtful and I should keep my mouth shut? Help. If I tell, do I wait until after the holidays? What would you want? I am too upset to make the decision myself, and my first instinct is to out this woman.