Kaeloo is the only character besides Eugly to not completely despise Pretty, but sometimes even she doesn't like Pretty. It's possible that both girls see each other as rivals, except in "Let's Play Lady Luck" where they are portrayed as friends.
Kaeloo's relationship with Pretty is probably worse than her relationship with any other characters. Kaeloo normally seems upset by Pretty's bullying, and in "Let's Play Top Models" she teams up with Mr. Cat to get revenge on Pretty for insulting her, and they both get her humiliated on the news. In "Let's Play I Like You", Kaeloo gets very angry at Pretty for revealing everyone's personal secrets on TV and punishes her, but later feels sorry for her (though she stops feeling sorry when she finds out Pretty wrote a book detailing all their secrets and published it). Kaeloo almost always seems very eager to keep Pretty as far away from Mr. Cat as possible, which may be due to jealousy.
Pretty is usually very mean to Kaeloo and insults her for no reason, such as in "Let's Play Beach Volleyball" when she tells Kaeloo to her face that she isn't cute, or in "Let's Play I Like You" where she is more vicious to Kaeloo than to anyone else. In some episodes, she alternates between being nice to Kaeloo and mean to her between scenes.
In "Let's Play Jetset vs. Jahjah", Pretty throws a party and invites everyone except Kaeloo, but the episode makes it clear that she actually wanted to invite her but the other guests didn't like her. Despite insulting Kaeloo in front of the guests, she privately apologizes to her for doing that. At the end of the episode, Kaeloo is happy to let Pretty join in when her and the others are hanging out.