IOS – iphone thinks it’s up to date when it’s not

You're in troubles. :(

How you updated your iphone to IOS5-beta without iTunes 10.5? Asking because iTunes 10.5 is only for developers now.

from the: http://www.appleinsider.com/articles/11/06/06/apple_says_devices_updated_to_ios_5_beta_cant_be_restored_to_earlier_versions.html

In releasing several pieces of pre-release software -- iTunes 10.5, Apple TV 2 beta, Xcode 4.2 Preview and Lion Preview 4 -- to its developer community, Apple on Monday warned testers of its new iOS 5.0 software that any devices updated to the beta cannot be reverted or downgraded to previous versions.

You need iTunes 10.5 - developer release yet - whats mean register yourself as developer for 99USD/year.

This is a known issue with iMessage. In your case, what has happened is that the SIM was registered on Apple's servers as capable of accepting iMessages. When your friend swapped phones, they likely kept the same SIM card. So now their old iPhone (bound to Apple's servers by its UUID) and the SIM card (bound by its own ID) are both registered with Apple to receive iMessages.

This article talks of possible fixes, and the possibility that Apple has something cooking (after all they should provide some capacity to remove the devices, perhaps from your Apple ID account). You can also head over to this article for additional reading and perhaps more solutions.

I wish I had a simple solution for you, but it may require calling Apple and discussing the matter with them. I would say you should also ask them to cover the cost of a new SIM should your friend require one.