When you say 'Stage' do you mean 'Type'? Type 1 and Type 2 Diabetes are quite different so she doesn't need to immediately worry over the fact that her mother died from Type 1, Type 2 is a more gradual disease.
What information has her doctor given her? Is she on medication, insulin or are they trying to control it with diet and exercise? Have they put together a health team for her: specialist, nutritionist, etc?
Type 2 Diabetes does not have to be a death sentence but it is absolutely a life-style change. The best advice we were given when my parents were diagnosed is to take it one step at a time. Change one food (like adding more veggies and fruits to the diet and removing candies, cake, etc) and deal with that for a few weeks, then change something else like adding water and reducing soda and sweet tea use. Start moving -- walking after a meal is an excellent way to help reduce glucose levels.
The main thing right now is to get her to calm down and breathe. Everything involved in dealing with this disease can seem incredibly complicated and confusing but I promise, in time, you and she will see that it's not impossible to understand it all.
Two books that I really like are:
The Type 2 Diabetes Sourcebook -- David Drum and Terry Zierenberg
Diabetes is not a piece of cake -- Janet Meirelles
Two websites that I really like are:
www.diabetes.org
www.joslin.org
If you want to talk to someone who has been through it with a parent (or two), please feel free to PM me. It's definitely a scary thing to hear but it's also very manageable.