Ok. . .so if I never met this guy I would give him a piece of my mind. He is 35 years old, and he should be able to get her a better ring considering he spent $1000 when he was 17. I thought he was 20-23 when I first read this post.
I know times are bad, but seriously how many times do you get engaged. Put a ring on lay-a-way. Buy a used piece of jewelry. There are so many options out there, and since he is old enough to know this, then this is what he should have done.
Furthermore, he should have known that his ring box was misleading. He is 35, and he has done this before. Don't mind me girls, but I am a bit annoyed with him. I do not know him or your friend, but I know she deserves a better ring.
I know many will feel that the ring is not important, which it is not the most important thing, but if you feel embarrashed to show your ring to your family and friends, then it becomes an issue. My mother has fingers that are around a size 8-8.5 (strange for such a small woman). When she got engaged, my father bought her a ring that was less that 1/3 a carat. The stone was also set poorly, so the ring looked tiny on her finger. She was very happy to get married, but she was embarrashed to show her ring. Others would make comments about the stone. Over the years she had upgraded, but one should still feel excitement about sharing her ring. Knowing that this person had purchased a ring in the past makes me feel he should know all of this.
Sorry for the rant, but I really do feel for your friend.