Malwarebytes is an anti-malware scanner it does not scan for viruses but is a good complement to any anti-virus installed.
I suggest you install avast or MSE for anti-virus and use Malwarebytes free version as it will not conflict with the anti-virus from the links below: avast! Free Antivirus | Download Antivirus Protection Software Microsoft Security Essentials - Microsoft Windows
Both are free.
Do multiple scans to ensure friends machine is clean, ensure a firewall is switched on the windows firewall is ok on vista/7 but not on XP.
Download a third party firewall for XP as the built in on only blocks incoming threats not outbound threats which may reside already on the computer.
Ensure windows update is set to automatic to ensure the computer is fully patched.
Secunia PSI will check for outdated programs that could be vunerable and update them.
Replace the host file as a precaution also.
Guide below on how to: Restore Windows HOSTS File Back to Default
You can use a second router to seperate your friend from your network putting them in a different subnet allowing no communication between the two networks but no Lan parties for your friend if segregated as has already been pointed out.