Hey Penguin,
I'm not sure I've seen this issue before. It seems like something has gone wrong with your friend's graphics. Did he run the Windows Vista/7 Fix before playing? It can be found here:
http://supermariobrosonline.tk/uploads/Windows_Vista_&_7_Fix.rarMake sure he extracts the .RAR file and runs the fix as an administrator (Right click -> Run as administrator). If your friend has already done this, then make sure he runs the SMBO Patcher (as an administrator) to get the latest updates. If none of that works, have him uninstall SMBO, disable his anti-virus (if he has one), then try reinstalling SMBO again. After SMBO is reinstalled he can try enabling his anti-virus again. He should then make sure to run the SMBO Patcher.
If your friend experiences further issues, we could try to set up a remote session in which I could try helping him with the issue directly.
Please let me know if any of this helps!