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I believe it's legal: we used to do this in the late 1990s; but your friend should take legal advice about this. What I can tell you is that it isn't a good idea anyway, as I seem to remember saying at the time. The CDs will be out of date almost immediately for one thing. Much better just to provide a link to the download site.
You are even allowed to distribute the JRE in "unpacked" form, as long as you don't change it. The readme file in the installation directory provides the details.
But EJP is right, it isn't a really good idea in this age of omnipresent internet.
Rather than guessing or relying on someone's personal comments posted on the Internet, I would recommend that you carefully review the license agreement and distribution policy before going forward. You can probably start your investigation here:
Edited by: Michael Ferrante (Oracle) on Dec 4, 2012 8:46 AM