Your supervisor sounds like a very lonely person who feels the need to confide in someone in a lower position than herself because she is leary of her own peers and that she will be labeled a troublemaker or even accused of not being able to run her department due to the shortcomings of those she supervises.

While you should be happy that she trusts you to keep her confidences, two things sprang immediately to my mind:

1. If something happened and one of those confidences leaked out, not by your doing or hers, who would be immediately blamed for the leak? Would she have your back so that you would not get into trouble for "spreading rumors to hurt another"?
2. Would your supervisor be willing to listen to your confidences regarding other members of the company you work for? (I am talking mainly about your complaints or differences in opinions of your supervisor's peers). Or would she go to that person and tell them that there are problems?

In other words, she feels she can trust you, but how much can you actually trust her when push comes to shove?

She may just need a sounding board, but if it really bothers you, then tell her that, while you value your friendship, you would rather not hear anything negative regarding your co-workers because you are finding it difficult to have a relationship with them because of your insider information.