I did some blind comparative listening tests with the same music files encoded as 320 mp3 (lossy) and FLAC (lossless.) After 1/2 hour of it I got pretty weary. I was able to tell them apart perhaps 2 times out of the 15 files I tested over that period of time. My conclusion was that, since 320 mp3 files take 1/2 the space of a FLAC file and sound virtually identical to me, I would rip my CD collection using 320 mp3 and have done so. No regrets. I've recommended the same thing to others with cries of woe and horror over it. But the proof is in the testing. It isn't hard to test since you can rip a track to various formats in seconds and have someone else do the switching during playback so you don't know which one you are hearing.
Basically, I agree with your friend that the 320 mp3 is 99.99% as good as the lossless formats. Take care.