Sounds like you're co-worker is similar to me - I have alot of weight to lose, and I'm 40 pounds along the way now (thanks to 6 months of biking, mainly!) And I'm about 5'2"", so not very tall either.
When I went shopping for a bike, I was very nervous and self-conscious about the process - imaging skinny-minny, super-cyclist kids not really taking me seriously. I decided I would buy from the store where I was treated the best, and go with the recommendations they gave me, since I didn't know much about bikes at all. I was concerned (perhaps unreasonably) about the bike feeling stable under my weight.
Anyway, Mikes Bikes in Berkeley was great - the sales person named Meghan was very helpful, supportive, gave good advice, and did a good job fitting me. She recommended, and I bought, a Specialized Sequoia Elite - about $1100. It has a suspension seat post and carbon forks, which I was told would help absorb bumps that we heavier riders will feel more deeply. The bike might be a bit heavy - but not compared to me!
I figured if I really stuck with cycling (which looks like the case) I'd probably upgrade eventually anyway, and after losing weight and getting stronger, I might be more comfortable on a different kind of bike, or be ready to appreciate and take advantage of a lighter bike, and certainly be in a better position to know my riding style, different components, etc.
Just my (long-winded!) 2 cents worth. Your friend is fortunate to have your help!