Check that Desktop Composition (i.e. Aero) is enabled:
Control Panel -> System and Maintenance -> System Advanced system settings Advanced tab Performance -> Settings
Does he have Aero enabled?
Windows Flag+Tab does not work when Aero is disabled.
I think due to this, it does not work on Vista Home Basic or Windows 7 starter either.
Is your friend holding down Win when hitting Tab?
Even on my XP work machine, holding Win and pressing any other key doesn’t pop up the Start menu; the start menu only pops up if you press Win and then release it without pressing anything else.
Mouse over something in the taskbar. If no image appears above it, either Aero is disabled or — as stated earlier — you have Vista Home Basic. You can confirm this by right-clicking on computer and selecting properties. Aero Glass isn’t available in this version of Vista.