The Aspire line of notebooks and netbooks should have a hidden recovery partition on the hard drive called Recovery Manager. It can be accessed one of two ways. Through Start > All Programs > Recovery Manager; or at computer startup by clicking ALT+F10 and then entering the security code 000000 (six zeros.) This partition should let you return the machine to factory specs (just like the day your friend brought it home.)
What's confusing me is where you say, "So I ran the System restore started after the first entry on the list." Are you saying you ran the Windows 7 System Restore or are you saying you tried to run the Aspire Recovery Manager? If you tried Recovery Manager and it failed because it became corrupted you'd probably have to do a clean install. If you and your friend have absolutely identical Aspire one D255E machines, and if you made recovery discs for your machine, they might work on his. But no guarantees because each machine's recovery media may be linked to that one machine only to prevent piracy.