What breed or mix is this dog? Do you know how old it is? Male or female? I think, if your friend can afford it, a behavorist to come to the house would be ultimate. Then he/she could observe exactly what all is going on and assess how your friend/family interact with the dog and make recommendations.
Are you sure it's fear aggression? What does he do? What body language, what circumstances exactly etc?
Short of that, the dog is going to have to gain trust in the people he lives with and that means no harsh, loud, quick movements interactions. Calm, confident, giving some directions to the dog, reward for good behavior, not making an issue or fuss over the dog when he's showing a crouching or cowering behavior. They need to go about their business, matter of fact without walking on eggshells around the dog, but still trying to keep things a little low key.
The dog can be taught some manners and a few obedience skills. This helps the dog realize who his leaders are and that he doesn't make decisions or lash out at anyone if he doesn't like something. BUT...he's going to have to have reason to trust them. And that building of trust won't happen over night if he's been abused.
They can impliment some NILIF.
http://www.dogbreedinfo.com/nothingfree.htm I don't know that it needs to be carried to the extreme, but the dog needs to learn that he has trusted leaders who will take care of him.
But, that he needs to do his part and pull his own weight as a working member of the group in order to get his food, treats, toys, walks, go outside, come inside, affection. So, in combination with the dog gaining trust in people, (a long road sometimes) he needs to see the humans as his leaders and himself as the follower. They must
NOT react to behaviors or body language that reflects his uneasiness or fear. This can reinforce that in the form of a learned helplessness. It teaches the dog that to be this way gets him all kinds of attention and that when he acts, the humans react. This puts him into a leader position. You can't have that.
He may not have been abused. This fear could have been reinforced from one small incident and built upon into a conditioned behavior. It is hard to say without seeing the dog and the interactions going on.
So, your friends would be well served to get someone of good reputation into the home to observe the dog. That would be beneficial if they're not very familiar with handling dogs. I hope things improve. Let us know.
For teaching this dog things, it is better to not have to handle the dog too much, force his rear into a sit, anything where he is not able to exert himself to figure it out. A really good, effective, fun and gentle method to train this type of dog would be motivation and reward training based on operant conditioning theory. Here's a site for them:
http://www.dogpatch.org/obed/obpage4.cfm