In addition to the issue of extending welcome and compassion to those suffering from mental illness--and there have been some great reflections posted online about that issue, see Sarah's and Ann's--I wanted to make a theological observation.
Within Christianity discussions about mental illness are often afflicted by Gnostic and dualistic assumptions, where there is a hard (even ontological) division made between the soul/spirit/mind and the brain. Specifically, we often assume that the soul is separate from the neurotransmitters in the brain. Thus, even though you might have, say, low serotonin levels in the brain in the case of depression, the soul has the ability to override the brain to "chose differently." Willpower and choice in this vision are radically separate and distinct from those low serotonin levels.
But things like willpower, motivation or mood actually are those serotonin levels. And even if reducing the soul to brain-function makes you nervous at the very least we must admit that the soul is radically affected by and dependent upon those serotonin levels.
In short, when it comes to mental illness we have to reject the Gnostic and dualistic assumptions that have governed the conversation about mental illness in our churches.
What this means is that mental illness requires incarnational theology and reflection. Depression is about our bodies. But the Gnostic impulses within Christianity often obscure that fact. The brain is an organ of the body as much as our stomachs and livers.
Our theological reflection must attend to embodiment, and this includes mental illness. And if we do this my hope is that not only will we become more accepting of the bodies of others but that we'll expand our understanding of "spiritual formation," coming to see how attending to and caring for the body in mental illness is as "spiritual" as bible study and prayer.