The problem with telling her that you don't want to mix business and friendship is that you might, at some point, decide to take on another acquaintance's child, and then it looks like you were lying. I would simply tell her that you don't keep a waiting list because if an opening comes up, you need to make sure to find a family at that time who is a good fit with the current children and families, and you cannot predict ahead of time what age group and/or personality type you would be looking for. So, it would be best for her to go ahead and make other plans. I think it could be very awkward to tell her that you know her child would not fit into your home because you don't click. This may be quite true, but I can't imagine it going over well. When the time comes that you have a spot, you would then not be obligated to interview them or let them know you have a spot. If they find out you had a spot and didn't call them, you could tell them someone else on your list was a good fit.
Good luck... this is a hard place to be.