i bought a canon 1000D recently after suggestions from TE.

got for 26k with IS, without bill ofcourse.

i must say its a really good camera. and u have tons of options for future lens updgrade,

ofcourse if ur upgrading from P&S, 1000d is way too much impressive,

i dont think ur friend will stick only to kit lens for long. as u'll be tempted for longer range!
canon has very good 50mm 1.8 for cheap and decent range of telephotos as well(barring ofcourse L series)