The woman is still sharp enough to grasp what's happening to her, at least sporadically, but the rest of the time she's lost in a fog, confused by the most commonplace situations, forgetting how to pronounce the simplest words.
Fiona is losing her mind (one of the more painfully apt phrases in the English language), and as her memory vanishes, Away From Her sets itself the task of examining what remains. In lesser hands this could easily have become treacly, even tedious going, but Away From Her turns out to be that rare, small film that packs an uncommonly large punch.