Misty is a Pokémon trainer and Ash's best friend.
Originally, Misty was meant to appear in "Link's Letter is full of Holes!" with Brock, but Dane Cook's sister (who was going to portray her) couldn't make it for filming, so she was dropped from the second season.
A similar thing happened with Cloud Strife from Final Fantasy VII; who was going to be part of an entire subplot with Link to see who was the better swordsman in Season Two, but was dropped due to his actor not showing up. The Cloud idea was mentioned by Rich Alvarez in FAQ 1.
It is unknown how Misty's relationship with Ash is, but it can be assumed that the two friends get along pretty well.
Despite their relationship being unknown, it is assumed that they both get along as well.