I would suspect that it does. I do know that it will see an NTFS
drive and read/write. I haven't tried my external drive yet. The
external drive did read/write under the Knoppix CD, so I would suspect
it will from Ubuntu. Will try it tonight, if no one answers sooner.

The drivers to support the USB ports should load when the Live CD
boots. I'm not sure if the external hard drive will automatically mount
with the live cd in. If not, your friend will have to mount the drive
in order to gain access.
If this does not work, tell your friend to remove the drive from the
external enclosure and put in the windows machine. He can then mount it
from within Ubuntu while running the livecd.

I'm using the live DVD, but would assume the CD has the same file
system capabilities. I had the USB drive connected and powered up,
and booted from the DVD. Ubuntu saw the external drive, and my
internal drive, and had no problem reading either one, nor writing to
either one. The external drive is a SimpleTech drive. (About as
cheap and simple as they come, nothing fancy here.) The internal
drive did not show up on the desktop until clicked on it, from inside
the file browser while working with the external USB drive. Both
drives are NTFS.

On second check, I was using the CD version, for the AMD 64, not the
DVD. I'm back under XP, and verified that there was no harm to the
NTFS file system. XP sees the new file and reads it just fine.