For the most part hes telling the truth. Pretty much all 50 inch large screen cabs use those ugly shite projection type tvs from Toshiba and Hitachi. There are a few 50 inch high res monitors,but those are typically made by Pioneer,are touch screen,and are for infromercial type cabs or whatever you call those things. BTW Namco even made a RGB to NTSC encoder,kinda like a jrok,for their cabs so thats prob what its using to send s-video to the tv.
In a way,you should be glad,because if something goes wrong with the monitor,you can prob take it to a normal shop to be worked on.
But,like I said,the image quality on those is crap,and always has been. They really only use them to be overwhelming on shooting games,or in racing and sim type games. Personally I perfer the 39 inch monitors or below. Much better video quality.
As for all the other things wrong,if the speakers are not working,and stuff is broken,and this stuff wasnt listed in the auction details,he should file for a refund if he doesnt want to fix the stuff,but it will be up to your friend to return it to the seller.