The sweet spot for used machines seem to be first or second generation i-processors from the high-end series. Still faster than modern budget machines, but with better build quality. Use DDR3 RAM and support 8-16 GB. Battery life may suffer, and weight may also be an issue. But when choosing between say a new $300 laptop with a crappy WXGA screen, crappy keyboard and a slow AMD CPU and say a used $300 Dell Latitude E6510 with a first generation i7 CPU, a nice backlit keyboard, 1920x1200 resolution and what not I would choose the latter. Any C2D CPU on the other hand will hit the roof with common tasks like 1080p videos.*
With a $500 budget it's a harder choice, a lot of nice laptops can be found new for that price. But a lot of really nice laptops can also be found used for that price.
With the said, I think the friend of the OP paid a tad to much considering the condition.
*Owning both a T9600 C2D system and a i5-560 system I can easily compare them both.