continuing a discussion

A friend of mine and I were discussing some of the difficulties of friendships. Sure, they are one of our greatest assets in life, but as with anything worthwhile, it's not always easy. Two questions came to our mind that led to a volley of conversation, and I'm curious to see how others might answer:

1. How do you know when it's okay to deliver news or advice that your friend may not want to hear but probably needs to hear? Are you better friend to not interfere or by not allowing them to continue on what might be a self-destructive course? Or does it depend on the severity of the issue?

2. If you can't act like "yourself" around a person and feel obligated to behave a certain way in order for them to accept you, can you really be considered good friends?