Gaining weight to build muscle??

Core training would really help him too... lots of it.
But yeah as eric says, he shouldn't stop eating, and get the protein up, up, up!!
(But he should avoid sugar carbs and saturated fats like crazy!)

Bodybuilders realized a long time ago that both building huge muscles and shredding fat are not conducive to one another. That's why there are two different phases, called bulking and cutting. When bulking you eat more then maintanence calories, with a focus on mass amounts of protein and long, heavy lifting sessions with more rest between sets and little to no cardio. The goal is purely to gain muscle. Once a sufficient amount of mass is gained, then everything shifts to cutting, which is eating below maintanence calories. Cutting is tough, because the goal is to keep the muscle mass gained from bulking, which is why bodybuilders are known for such intense diets. They can't do too much cardio, because cardio leads to loss of muscle mass (ever seen any bulky marathon runners? exactly), so the focus has to be on diet combined with special training techniques (less rest, circuit style training) to drop the fat. Bulking then cutting was developed by bodybuilders to prepare for contests.

There are entire books devoted to this subject, but the most important thing in my opinion is to acknowledge that you have to focus on only one thing at a time, either bulking up or cutting the fat.

That layer of fat your friend is having trouble losing is the hardest part for any of us to lose, I'm in the process right now and let me tell you that with a body type like mine you have to be 100% dedicated to it, until recently I actually thought it was impossible for me to have a 6 pack. All previous posts are very good posts. It's pretty well all been summed up, stay away from sugar and saturated fats. Another thing to try a steer clear of is fast digesting carbohydrates, (white bread, white pasta, beer). He needs to get his carbs from whole wheat products and vegetables. A lot of people try to go no carbs at all when they gain/lose/strengthen but I think it's a mistake. I wasn't getting enough carbs awhile ago and I was always tired and not growing at all, once I balanced my diet more I was spinning with energy and growing a lot faster.