Twiglet, I'm sure I don't know you but you are actually describing me........
Anyway, I have the same thing with DS2 (age 3), I have to 'translate' to everyone what he says, but he has great vocab and strings long sentences and ideas together. I took him to a drop in speech therapist last week and the conclusion is that his pick up of certain sounds is slighty immature which makes him hard to understand esp. when talking fast (favourite phrase in our house is 'just show me!' She didn't seem that bothered and we have decided to give him another 3/4 months to catch up before looking into it further. Kids develop at different rates so your friends DS will catch up in his own time!
Incidently, I was going to leave it until his 3 1/2 year check to talk to his HV until his nursery teacher mentioned it at parents evening - so someone will bring it up with your friend.