Brava, Jaybay! There's nothing that I can add to that. You said it nicely. :)
Ghilly
Your friend has a very difficult decision to face. When we take animals into our home, they trust us to take care of their physical and mental needs. Your friend has broken that trust - unwittingly - but it's a hard fact to understand when we feel love and a connection to our pets.
If your friends can take a step back and view the situation objectively, they may find that they simply cannot meet the needs of a dog, whether it is one dog or two. Medical care is an essestial part of providing care, and if it is completely impossible to provide it, they must look at what is best for the dog. That means finding it a home with owners who are willing and capable of taking care of medical issues, both acute and preventive.
It's an unfortunate thing in our culture that people tend to view dogs and cats as stuffed toys with personalities instead of the living, sentient creatures that they are. Sadly, that mindset is promoted by rescuers and shelters in that any dog who might have a problem is unadoptable. We've been discussing this issue on the Animal Cops Rant thread. The very people who call themselves trainers bait and provoke the dog to the point he must respond negatively. The public gets the erroneous perception that these dogs are "problem" dogs, or "bad" dogs, and somewhere out there is a "good" dog with no mental or physical issues. They just haven't found that dog yet, so off they go with a revolving door of dogs that don't work out.
Sorry, I didn't tend to digress so far, but your friends must look at what is best for the dogs. In the end, if they simply can't afford medical care, including spaying, neutering and well-care vaccinations and checkups, they are not ready to have a dog in their lives.
I understand most people are in a tough spot economically speaking these days, but there is usually something in the home that can be given up or sold if necessary to raise funds for veterinary care. Shoot, I had to sell my Mustang to pay for two major emergency surgeries to save my dog's life after she impaled herself on a plant stake. There was no question of not doing what we had to do, it was only how to raise the money. It's time for your friends to think outside the box and either find a way to raise the money for vet care, or find the dogs a new owner who can afford it.