You should be drinking at LEAST 2-3 quarts a day, if not 4-5.
Most people go through their entire lives being dehydrated. It's very easy to, seeing as how it's difficult for anyone to down that much water a day if they're not used to it.
You should be peeing from 4-7 times a day, and it should be clear. Moderate-to-dark yellow is bad. Day-glo yellow just means you remembered to take your vitamins.
edit: Oh, and your friend is a stupid asstard and should refrain from speaking whenever possible. Next time you see him, either punch him in the throat or give him a tipper courtesy of me. I'll give you a dollar if you provide a pic. Sorry, it just REALLY irks me when people start spreading stupid, unintelligent, groundless misinformation.