Actually, your friend does have the basic idea right, although his terminology is completely wrong. MHz is nothing more than a measurement of cycles per second, so IBM/Motorola Power PC microchips (the CPUs used in Macs) do not run at more cycles per second than an x86 cpu. However, a Power PC chip can actually perform more operations per clock cycle than an x86 cpu, which means that at equal MHz, Power PC cpus do have a slight advantage over x86 cpus. However, this advantage is not more than a maximum of 100 MHz (ie a Power PC 866MHz chip would be roughly equal to a PIII 966MHz chip). Unfortunately, 866MHz is as fast as Power PC cpus get, and for the price of an 866MHz Power PC equipped Mac ($2,499) one can easily buy a 1.4 GHz Athlon system from almost anywhere (~$1,400) or a 2.0GHz P4 IBM ($1,958) and add several options before you come to the price of the base 866MHz Mac. So although the Power PC does have a slight advantage clock for clock, the advantage is negated several times over by the tremendously low maximum speed and the high price of a Mac. Also, the SpecPref benchmarks (a cross-platform unoptimised benchmark suite that is very good at measuring the CPU alone) shows that the Power PC cpu does not perform significantly better than an equally clocked x86 CPU.
Zenmervolt
EDIT: That 1066MHz G4 (IBM PPC 7xx) is a severe overclock and the fastest officially available PPC chip is the 866MHz part to the best of my knowledge. To get a PPC 7xx chip to run that fast requires some serious cooling, dedication, and luck. Also, just for fun, inform your friend that the IBM has least a half stake in the technology behind the Power PC chip, Mac people hate to be reminded that their supposedly wonderful computer owes at least part of its existance to Big Blue.