If your friend can access the drive using one of the two methods I listed, and he can copy the important data off the drive, then yes, a Toshiba restore would "fix" the computer - by wiping the drive and restoring the original, factory image.
However, if you have access to a Windows 7 install disc (for the version your friend has installed on his laptop), then you could try to do a repair install. That will leave the data on the drive and just reinstall Windows. His personal information and files will still be there. But, I would still try to copy the files from the drive before doing that, since there is always a chance that the wrong choice is selected during the install and/or the data is accidentally lost during the reinstall action.