Mediation isn't so bad - it really can help to solve problems.
I have difficult neighbours, although the ones in tereh at the moment are not too bad. A lot of teh houses around here are multiple occupation and sometimes there are inconsiderate young poeple. LAndlord on one side is great, the other is a bit dodgy.
If you are both council or Housing Association tenants, make sure the landlord knows about the problems. It may be she needs a bit of help and the Housing Officers can sometimes get the right people involved. At the very least there will be a record, from the sound of it there already is if she was moved.