The method to connect the two computers together is internet connection sharing. Your friend will firstly either need to be using a USB connection to the cable modem or have two ethernet cards installed in PC1. You then need a cross over cable to connect the two pcs together. If you have winXP use the connection wizard to setup the connection sharing.
The alternative is to buy a cable router (prices start around £30) and connect this to the cable modem. The two computers then connect to this. The advantage of this is that PC1 does not need to be turned on in order for PC2 to connect to the internet, and the setup of a router is generally much easier than ICS.