Launch Disk Utility and look at the drive in the sidebar. Does it show more than one volume for the drive, as in this example (the drives are the "WDC" and "Samsung" icons, with the volumes indented under them)?
If so, your friend partitioned the drive and made the boot partition rather small. He may have kept the bulk of his documents on a second partition, or have set up a large Boot Camp partition. If there is indeed more than one partition, you'll either need to repartition the drive to make it all one partition and reinstall the OS and all your apps and data, or move your iTunes library and other large items to the second partition.
If the drive shows only a single partition, click on it and see what it says for capacity at the bottom of the Disk Utility window. If it shows significantly less than the expected capacity, your friend may have incorrectly created a single small volume or there may be something amiss with the drive and it may need to be repartitioned. Try booting the system from the Mac OS X install disk and running a repair on the volume, though, and see if that helps.
Hope this helps.