There are a couple of ways you could do this.
The simplest would be to create a user account for your friend and use this as the default FTP/SSH user for the subdomain that you create for them. This way, when they FTP to the server, they would see their particular files only, they would not have access to your other (sub)domains.
You could also create a WebID attached to your friends user account, giving them any Web Panel privilages that you wanted to and restricting them from things you didn’t want them to access.
Save [color=#CC0000]$50[/color] on DreamHost hosting using promo code [color=#CC0000]SAVEFIFTY[/color] ( Click for details )