iPods can only be associated with one iTunes library at a time. If your friend synced it with his (different) iTunes library, that may be why you are not able to add additional content from your iTunes library. If the Manually manage music and videos setting was used (iPod is not associated with a particular iTunes library), you should be able to (manually) add content from more than one iTunes library, but I don't know what was done based on your description.
but would not accpect more data
Please explain that in more detail. What is the indication that it does not accept more data? How did your friend add the additional "data" to the iPod?
Ideally, to use a larger storage capacity iPod like 160GB iPod classic, you should use automatic syncing from your one iTunes library. Then, any new content (that is compatible with iPod) syncs automatically when you connect it. There is no need to manually load new stuff (and manually remove old stuff). That includes videos; you can set it to automatically add unwatched content, and remove videos that have been watched. For songs, you can set it to sync everything in your iTunes music library (including playlists), and keep your iTunes music library and iPod's music library "in sync" automatically, every time you connect it.
If you want to set that up, and my guess is correct that there's nothing actually wrong with your iPod, you just need to do a Restore on the iPod using iTunes. This erases the iPod, reinstalls its software, and sets it to default setting. You then sync the iPod to your iTunes library, which associates iPod. You can post back for more info for this choice.
Alternately, if you want to troubleshoot the iPod with its current content intact, please post back with more details about your situation.
