Applegran
you said you remember "reading that the brains of compulsive liars are different from the rest of ours" You may have seen something about the brain imaging studies research.
There are studies, forgive me for not spending time looking them all up. Some include studies on Psychopathy/Antisocial Behaviour Disorder which has as a diagnostic criteria "compulsive lying". The studies found more white matter than gray matter in the prefrontal cortex* of the compulsive liars.
* the area of the brain that enables people to make moral evaluations and feel guilty about doing wrong.
In the case we are talking about here, we don't know if there is is a pathological reason. However drivergran would have been regarded as a very good relative for giving actual the examples of behaviour she gives here if she had spoken to us when I was involved in research at the Institute of Psychiatry! Many people have disorders or are on the end of the spectrum of a disorder which, by its nature, does not mean the person themselves comes for advice/help. Often it is relatives who have to ask for help and then we need to ask for as much info as they could give us.
However, as I was about to say, we can't tell what is actually going on here in terms of clinical explanations. I think the best thing we can do is support the OP and her daughter with suggestions as to what we might do or maybe some people have some experience of this and can tell us how they coped.
There are quite a lot of conditions in which compulsive lying is a feature. So I would advise her daughter to go to the GP and talk it over if she needs help, and be ready to describe other behaviour and personality traits her husband has. I do hope the poor girl's life begins to improve once she addresses this issue. I really can't see how she can manage her life trying to live with it, unless he never does it at home!
What were the first ever records that you bought and when?
Parents-in-Law. What do/did you call them?