I know as well as most that viruses can only come in the form of a program/executable.  When I explained this to him, he said that when you open a JPEG, you are running it.  I asked him if he ever saw this in person, and he said, yes because he read it on the net.  I mean, we all know how factual the internet can be.
The more I think about what he said, the more I think he's on crack.