From PEOPLE Magazine Click to enlarge
Bundled up against sub-zero temperatures, Shania Twain warmly welcomed the new year with a slow jog in her hometown of Timmins, Ont., holding the Olympic torch aloft amid a throng of cheering spectators. Carrying the flame—en route to Vancouver for the Winter Games—on Jan. 1 was an act rich in symbolism for the 44-year-old Canadian. "She had the best time of her life. She didn't care it was 33 below zero. You would have thought it was 75 and sunny," says a source close to the singer. "All of her family was there, her closest friends and [son] Eja. That made it even more special." And capturing it all on film was one of the happiest surprises of Twain's life: her constant companion of a year, Frédéric Thiébaud.

Twain's improbable romance with Thiébaud (the Swiss businessman whose wife allegedly broke up Twain's marriage)—along with new projects like an upcoming guest-judge stint on American Idol—shows just how far she has traveled since her personal life imploded in 2008. "She's full of life, wanting to experience new things," says the Twain source. "She's happier than I've ever seen her."

It's an epic comeback for the singer, who was devastated by the news her friend and confidante Marie-Anne Thiébaud was seeing Robert "Mutt" Lange, her husband since 1993 and father of Eja, 8. "It threw her for a loop," says a Swiss pal. Heartbroken, Twain retreated to her native Canada to be close to her siblings. She has opened up on her Web site about some of her darker moments, like the time Eja walked in on her "listening to some sad music and sobbing and slobbering over my computer's keyboard." Healing, she wrote, "is serious business and has taken a lot of the wind out of my sails, slowing me down at times."

When she returned to Switzerland, where she still lives, Twain found a steady supporter in Thiébaud, 39 (who is in the process of divorcing Marie-Anne). "He would take her to play tennis, try to get her out of the house," says a pal. "It was platonic. He was trying to get her back to herself." After the duo took a trip to the U.S. with friends in December 2008, things got romantic. Twain revealed just how close they had grown in a note to fans on her Web site last August: "Having gone through the suffering of his family splitting apart at the same time under the same extreme circumstances, he understood me better than anyone," she wrote. "We leaned on one another through the ups and downs, taking turns holding each other up."

With Frédéric, friends say, Twain has a partner who is utterly smitten, whether escorting her around the globe (she posted a video, shot mainly by Thiébaud on his camera phone, of the pair skiing in Switzerland, skydiving in Florida, riding horses in Egypt and biking through London) or to high-profile bashes like June's Swiss Red Cross Ball (shell-shocked by her split, she had canceled on her favorite charity event the prior year). "They really radiated joy, but in a very discreet way," says one attendee. "Frédéric held back a bit and let her shine."

Twain has eased back into the spotlight, stepping out for the Rock and Roll Hall of Fame concerts in October and the launch party for the music video site VEVO in December (both in New York City), and for Idol's Chicago auditions (airing Jan. 19). And she continues to work on her music. "2010 is going to be an amazing year for her," says the Twain source.

Despite the globe-trotting, Twain and Thiébaud love spending time at home in Switzerland (including at a former mountainside mill Twain is converting into a horse ranch, where, according to a Swiss pal, they go to "feel completely removed from the world"). Now that Thiébaud is in the picture, says the pal, Twain has been indulging in activities she's always loved: riding horses, sailing on Lake Geneva, skiing. "Shania and Mutt have both moved on," says Twain's friend Thomas Bindschedler, "and it may be the best thing for both of them." The exes are "very civil" for Eja's sake, says the Twain source. Sources say Lange, who lives in La Tour-de-Peilz, is still involved with Marie-Anne. And the singer is still smarting from her former friend's betrayal, says the Twain source: "It was almost more devastating than the end of her marriage."

As for the odds-defying romance, "They never ever expected anything like this [to happen]. They were friends," says a source close to Thiébaud. "They helped each other, and then they realized there was something there. It's just a really beautiful love story."

  • Contributors:
  • With reporting by Dana Kennedy/Switzerland,
  • Julie K.L. Dam/New York City.