Past perfect rule is discussed pretty often but still leaves

She played with her friends when the babysitter arrived and She had been playing with her friends when the babysitter arrived are both gramatically correct. However, the meaning of each sentence is different.

The first sentence means that she started playing with her friends as soon as the babysitter arrived. For example, this sentence could be used to define a bratty kid whose strict (maybe sadistic.. ) babysitter does not allow playing with friends. We could say something like : Jane is very defiant child. Her babysitter has instructed her not to play with her friends but she played with her friends when the babysitter arrived.

The second sentence means to convey the circumstances under which the babysitter arrived. It simply means that she had just finished playing when the babysitter arrived. We could say something like Jane's friends were leaving her home when the baby sitter arrived. So it was apparent that She had been playing with her friends when the babysitter arrived.