<snip> and I've noticed people are now actively avoiding coming to my desk to speak to me about things. I've been getting a lot of e-mails and phone calls instead.
Then you really have reached the point where you can legitimately complain to her supervisor and/or HR. She is impeding your ability to do work and your co-workers' ability to communicate efficiently with you. She has the attention span of a gnat and can't keep her attention on her own tasks.
I'd also start lobbying IT to change the phone setting so she doesn't interrupt you do tell you "Barb's calling!" while your on the phone with Bill. In our old office, the open concept plan was terrible, so we relied on an instant messaging function a lot.
But you shouldn't need
to take all those steps.
She has gone beyond the point of good etiquette and now needs some serious bluntness: "You're not a part of this conversation. Turn around and focus on your own work."