I, too, am a newbie here, but I think the easiest way is to add your friend as a new user to your account. That will give him his own username and password for FTPing his web site without compromising your security. (He's your friend today........)
Add his domain using your control panel selecting "Fully Hosted"
On the setup screen, you will have the option of which 'home' account to put the domain in... choose your friends newly created account.
Make sure you also select your friends account as user for CGI scripts .
That's should be all there is to it.
You can then add any databases, etc he requires.
Don't forget to change the DNS records at his registrar to point to dreamhost's nameservers
I'm sure if I have missed something, someone will jump in and correct me
Hope that helps
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