Wash,
Jailbreaking alone does not unlock the phone, but just makes it possible t install UltraSn0w that unlock the phone.
In your friend's case, he maybe be in some trouble. The baseband (think of it as the modem that does the actual network connectivity) that comes with iOS 5.0.1 is not unlockable, not now for sure.
Was the iPhone 4 bought contract from AT&T? If so, even AT&T will not unlock it.
There is an expensive solution called Garvey SIM, which is hardware based, but at least it will work.