I have a friend who is going through the interview process with another department. She is two interviews in, and it sounds like she has a good chance at getting the position.
Should she tell her current manager that she is interviewing with another department? While everyone says things are "confidential", in my experience, this often gets found out with internal interviews. If she doesn't tell her current manager and her current manager finds out, then I think that destroys the relationship a lot more than her telling her manager that she is interviewing.