[eluser]Xclamation Design[/eluser]
Have you checked to ensure that the encryption keys match on both installations/setups?
I did wondered whether your friends server has 'Display_Errors' turned on?
A good test, would be to create a new user and test that user can login on your friends setup. If you can create a user and login as that user then it should be ok...?
If you are still having problems, perhaps you could provide copies of both of your servers global settings/php.ini and copies of both your and your friends CodeIgniter config files?