According to Gateway it has enough resources to install Windows 7 but the problems your friend is having, might be good to check the diagnostics of the Harddrive.

Sounds like the harddrive might be failing.

Check it using the harddrive manufacturers software or using UBCD

He will need to burn this as an .iso (bootable cd). UBCD has harddrive manufactures diagnostic software on it.

How to burn an .iso