Don't push your friend into a gun he doesn't want to buy. Seriously. A friend of mine did that to me with my first pistol - a USP .40S&W - and I wish he hadn't, because I didn't really care for it.
At least if he gets something else and then decides it was a bad choice, he can rationalize "hey, my friend was right". If you push a Glock or XD on him, he might think that even the "good" gun is poor advice, if he doesn't like it, and then he'll be out a sizable chunk of change.
Cost is big to him obviously, but to combat that, I'd say to him: ammo is pretty damn pricey too. In the case that he doesn't really want to shoot, just wants something for defense, a cheap gun wouldn't matter all that much, if at all, and his money would certainly be better spent on ammo.
There are also always used Glocks and XDs, easily acquirable.
Personally, I'd suggest he get a CZ75. It's right under the $500 price mark, shoots like a dream (by all accounts), and has a $300 .22LR upper available in case he wants to train, on the -very- cheap using the same platform.
After all, becoming proficient with a carry-sized weapon is not the kind of thing most people find all that enjoyable, and it can make becoming good difficult.
If for some silly reason, he's set on getting a plastic pistol, I'd say look at the Taurus PT111* or the 24/7, Sigma, XD, and Glock, in that order. Maybe bump the XD up, if S&W is still offering the free holster + extra mags deal. IMO, Glocks are a wee over priced, as their cost has gone up disproportionately to what they offer, and what the competition costs/market increases. Good pistols, well made, etc. just a bit over priced (and I personally don't like the grip rake angle, but that's preference).
* I carry a Taurus PT111 Pro, 2nd Series (stainless slide). It's a 9mm, and I got it for $320 about 4 years ago; the current, 3rd Series pistols seem to sell for about the same as the 2nd Series did then, so he can expect to find a blued version (polymer grip) for $300, give or take. It is, IMO, as cheap as you get without too many serious compromises in shootability, providing a good "enjoyable to shoot"/economicality/effective compromise. I've only had one problem with feeding/extraction, and that was with some really gummy/crappy ammo in cold weather (Blazer Brass - total crap). Other than that, it's put about 1200 rounds down field w/o any malfunctions.
I
highly recommend the current Taurus Millennium (PT111) 9mm pistols. Their triggers are, IMO, nearly as, or just as those found on Glocks and cost half as much. The double-stack magazine (12+1 rounds) is not nearly as blocky or obtrusive as other similar designs, and fits the hand quite nicely.
(I've got a write-up
here describing the differences between the different PT111 Series pistols; take a read so that if you point your friend to them, you'll know what to point him to).
Anyway, take him to the range and have him try some of your guns, and at least provide him with some options.
