I would advise anyone updating to Steam to make a copy of their HL dir before doing so. I have seen Steam make a bad install on 3 occassions, and a majority of servers are still not upgraded to Steam (2/3). Steam WILL convert all of your old HL files that are needed for gameplay over to Steam, there is an option to do this or not. If your clanmate friend did that, he is probably going to need to reinstall everything if it got corrupted.
The program is still pretty buggy, but it does have some nice features. The IM built into Steam is probably the best improvement. When you hit ESC, it doesn't have to readjust the resolution, it just shows an overlay of menu options. When you get an IM msg in game, it just lets off a little bell. You hit ESC, and can see the IM msg right away, and switch right back into game if you want to. Very nice. It also allows you to see if the person you are chatting to is in a game, view the game's info, and join that game from the IM if you wish.
The biggest complaint right now would be the shield exploit that allows someone to be invulnerable. Yes, it was in the beta before they released 1.6 public, but they must have felt a need to rush Steam out the door to try to get their Sept. 30th deadline that didn't happen. The exploit makes playing on a server without an admin a pain in the ass. Even so, I do like seeing how pissed off the people that do nothing but awp get when the shield is in use. Heh.