A CRB is just paper for recycling once it has been printed! If your friend knows you well and trusts you, you do not need an up to date CRB - unless she needs you to be OFSTED registered.
The same with first aid, if it is less than 3 years old it will be fine unless she needs OFSTED.
I would advise you to get nanny insurance and you will need to be employed, she will have to pay tax, NI and employers NI.
Two little babies are so much different to one! You need to make sure that your ideas on raising a child are similar, feeding, sleeping, discipline (obviously down the line a bit) Who will provide the extras you will need, double buggy, highchair, travel cot at your friends. Who will pay for your child's food/classes? If you bring your child's food and then either of them won't eat because the others looks far more appealing? Or would you contribute to your friends shopping bill to feed your child? (just an aside, a nanny generally has her food during work hours, provided for!) If your friend wants her child to go to xx class but you feel it's too expensive/is at the wrong time for your child's nap/feed time?
I would check out this thread about the ups and downs of a nanny share, which your situation will be similar to.
What happens when you add siblings into the equation? Especially if you both fall pregnant around the same time, how will you manage two babies and two toddlers? How about getting them out and about?
One last thing, how close are you to this friend? You have to think about how your relationship will be affected if you or your child hurts/injures her child, whether accidentally or not. Or if you/your child are ill and you let her down at the last moment. If an employee phones in sick the employer can get grumpy but not a lot she can do about it, if it is your friend letting you down, it feels more of a slight, iykwim? What about if she is late home? If she's supposed to be home at 6pm and that gives you time to get home, bath and feed your baby and put him/her to bed in time to cook supper for you and your partner and then have a relaxing evening but she gets stuck at the office/in traffic and doesn't get home until 6:45, will your partner be able to collect your child so his routine is not too disturbed or will it all be thrown out, resulting in him needing to sleep later in the morning but not being able to? Your child will generally have to take second place to your friends needs.
Sorry, my post sounds like I am trying to discourage you, I just want you to think of all the negatives. Just make sure that you are both on the same page.