What is the role and significance of Mistress Hibbins in Nathaniel Hawthorne's The Scarlet Letter?

Toward the end of the
novel, afterandhave determined to run away together, Hester seesin town.  Mistress Hibbins says
a number of things that make it clear that she understands the relationship between Hester and
Arthur.  When Hester feigns confusion, Mistress Hibbins asks her,

"Dost thou think I have been to the forest so many times, and have yet no skill to
judge who else has been there? . . . I know thee, Hester, for I behold the token.  We may all
see it in the sunshine! and it glows like a red flame in the dark.  Thou wearest it openly, so
there need be no question about that.  But this minister! . . .  When the Black Man sees one of
his own servants, signed and sealed, so shy of owning to the bond as is the Reverend Mr.
Dimmesdale, he hath a way of ordering matters so that the mark shall be disclosed, in open
daylight, to the eyes of all the world!"

In other
words, Hibbins claims that she knows sin and temptation well enough to know who else has
experienced it.  She says that though Dimmesdale tries to hide his sin, the Devil still knows of
it.  Her words even foreshadow the ending, where Dimmesdale finally confesses (sort of) and then
dies on the scaffold. 

Apparently Mistress Hibbins has known for a long time
that Dimmesdale is Hester's co-sinner, and she has kept this knowledge to herself.  It turns
out, then, that she is more discerning as well as more compassionate than her Puritan peers. 
Those "self-constituted judges," as the narrator described them, wanted Hester branded
or even hanged for her crimes.  This society had little sympathy for her and was ready to treat
her co-sinner the same way.  Rather than "out" him, however, Mistress Hibbins has kept
her knowledge to herself, reserving judgment because she knows that he will be judged by a
higher power (though, for her, it is the Devil), in the way these so-called Christians ought to
have done.  The contrast between the so-called good, God-fearing Puritans and the godless witch
actually makes the Puritans look even more self-righteous, officious, and
merciless.