Hey,
Only continue if you trust your friend fully. IRCd's are often ddos attacked if they get too popular, and pose some security risks. I only recommend you using it if your vps has over 512mb ram with perfect uptime and security protection. But, proceed at caution.
You will need to create him an account, and then add SSH access to it (Account Functions -> Manage Shell Access) and find his account, and enable normal shell. You will need a dedicated IP, so add one (Account Functions -> Change Site's IP Address), find his account and change it to an IP that is not shared.
If you have done everything, you should be set.
You will need to access ssh, i recommend using
http://the.earth.li/~sgtatham/putty/latest/x86/putty.exe (for windows). open it up, put in the dedicated IP address and open. it will then ask for your username and password, type in the username and password of the account you just added ssh to. (Please note it won't display the password, but it is typing it in).
Once your in your need another guide to help you install your ircd and services. i recommend using unrealircd and anope.
Here is a good guide to setting an ircd up:
http://news.softpedia.com/news/Building-Your-Own-IRC-Server-With-Services-40772.shtml
If you find this too much, I sell IRCd's for $7.50+ so pm me.