If you can't see your friend's video, the problem is either with their video/webcam, or with your settings.
Check your privacy settings.
In Skype, select Tools, then select Options. In the Skype Options window, under Automatically receive video and share screens with, make sure that either anyone or people in my Contact list only is selected. If you select no one, you won't be able to see any video.
If you still can't see your friends video, then likely the problem isn't yours. Recommend that your friend follow the steps in this article.