As you probably know it's not possible to have an encrypted home folder without a password. The login password was used to encrypt the folder, if the computer doesn't know it, it can't decipher your home folder.
As this is the whole point of an encrypted folder, you just can't have both things at the same time (encrypted folder and automatic login).
You have a couple of workarounds:
Create a new user account for your friend. Get sure that it's home folder is not encrypted and set the computer to autolog to this account. You will need to add it to the superuser group to allow him to do administrative tasks.
You can also disable encryption in your home folder, Jonik answer to this question is quite straigh forward.
If you need to disable the autologin from the command line, check this enzotib answer. If you are not able to log to the GUI, you can usually access the command line pressing CTRL+ALT+F1.
If this doesn't work boot into recovery mode and follow the enzotib guide. You can usually select recovery mode on the grub screen, the first menu that appears when booting, where you can select the OS that will be loaded. If you don't see this screen try to press shift while booting.
You can try to upgrade several important packages (gtk, glib, etc.) from the ricotz/testing ppa, then compile Nautilus 3.6 from source.
NOTE: Due to you are going to upgrade several important packages of your system, I strongly recommend to do this in a Virtual Machine or in a Test Machine only for testing purposes to see is everything is OK.
Make sure you have enable the "Source code repository"
In the Menu Bar choose Edit -> Software Sources. Click to enable "Source code repository".
Just in case I use the "Main Server" to Download.
Then..
1) Open a Terminal and install the following packages.
sudo apt-get install build-essential libtracker-sparql-0.14-dev wget
2) Install build dependencies.
sudo apt-get build-dep nautilus
3) Add ricotz ppa and upgrade the system.
sudo add-apt-repository ppa:ricotz/testing
sudo apt-get update && sudo apt-get upgrade
sudo apt-get dist-upgrade
4) Trash-Full icon in nautilus-places.
Nautilus 3.6.3 use the following icon for the trash-full (user-trash-full-symbolic.svg), not present by default in Ubuntu 12.04.
You can grab the icon from Ubuntu 13.04 to put it in /usr/share/icons/gnome/scalable/status/ directory.
To avoid this:
Once you have the correct icon type in the Terminal.
sudo mv /path/to/trash/image/user-trash-full-symbolic.svg /usr/share/icons/gnome/scalable/status/
sudo chmod 644 /usr/share/icons/gnome/scalable/status/user-trash-full-symbolic.svg
sudo gtk-update-icon-cache /usr/share/icons/gnome/
To look like this:
5) Create a folder to download the source code.
mkdir ~/Downloads/src
cd ~/Downloads/src
6) Download the nautilus 3.6.3 (raring) source code from Launchpad.
wget https://launchpad.net/ubuntu/raring/+source/nautilus/1:3.6.3-0ubuntu16/+files/nautilus_3.6.3.orig.tar.xz
7) Extract the source code.
tar -xvf nautilus_3.6.3.orig.tar.xz
8) Basic steps to compile & install. (You can change the steps according to your needs, add prefix etc.).
cd nautilus-3.6.3/
./configure
make
sudo make install
9) Kill nautilus.
10) Just in case... set default prefereces like show-desktop-icons, no show trash-icon in desktop, etc.
gsettings set org.gnome.nautilus.desktop trash-icon-visible false
gsettings set org.gnome.nautilus.desktop home-icon-visible false
gsettings set org.gnome.desktop.background show-desktop-icons true
11) Finally reboot the system to see the changes.
Result:
Hope this helps.
Best Answer
Among other features that were unfortunately removed in Nautilus 3.6 (used by Ubuntu 13.04 by default) was the extra pane/split screen, invoked using F3. It was removed because the GNOME developers thought it didn't work well on touch screens and that placing one Nautilus to one side of the screen with another to the opposite side fulfilled the same purpose. It doesn't, but I'm not a developer! Links to the bug and the commit.
One way to get the feature back is to install a patched version of the older Nautilus 3.4. The easiest way to do so is to add a PPA managed by the good people at webupd8.org. Unfortunately this patch version is only available for Ubuntu 12.04 and the now-unsupported 12.10 and 13.04 releases.
Run these commands in a terminal:
N.B.: The instructions contain a warning, namely that if the dist-upgrade command attempts to remove packages, there is a problem and you should not continue. Otherwise things should be fine.
For Ubuntu 14.04 you'll need to patch Nautilus manually. This answer can get you started, but unfortunately I can't find what to patch exactly.
The simplest option is to change file managers. Nemo is quite similar to what Nautilus used to be. Yet Another User mentions below that it is in the repositories, but this webupd8.org PPA will install the newest version: