For locking tips see this link:
http://www.sheldonbrown.com/lock-strategy.html
I use a U Lock as shown and a cable to secure the front wheel as well.
For $800 your friend could get a new bike like a Surly Cross Check. If you want used, look for a good name brand (Specialized, Giant, Surly, Trek, etc.) but make sure it has eyes for mounting a rack and room for fenders if you plan to commute on it.
For your bike, I would look at a Cyclocross setup. You would get road bike ride with wider tire capability. They are as fast as a road bike and more robust for bigger riders. Good luck!!