The comparison page musicvid posted will show you "what's missing" in Vegas Movie Studio compared to Vegas Pro. What might not be immediately obvious from that page (until you click a bit deeper) is that the Vegas Pro and Vegas Movie Studio user interfaces are essentially identical. If you are used to Pro, and sat down at a computer with Movie Studio already open, you might not even realize it was the Studio version for a while.

http://www.sonycreativesoftware.com/moviestudiope/gallery

The Studio version doesn't have video scopes and histograms, doesn't have some of the automation features of Pro, doesn't have support for multi-cam editing, etc., but the way you edit, overlap events, drag and drop effects and transitions, etc., are the same as Pro. The most obvious differences for me are that Studio won't be able to do any scripting, can't do nested projects, and doesn't have the Bezier Masking feature.

Musicvid's link will show you feature by feature what the differences are, but rest assured that you would be very comfortable using Movie Studio or teaching it to someone else because it is essentially the same program as Vegas Pro, minus some features.

Conversely, if the friend eventually decides to upgrade to Vegas Pro, he should be able to get to work immediately as almost everything he did in Vegas Studio will work the same way in Pro. In fact, Studio's .vf project files open up in Pro as well.