First, let me say that it's beyond nice of you to chip in for a new ring for your friend.
I still don't quite "get" the situation though. Not sure why it matters to me except that I'm stubborn and like to understand things. *LOL*
I can completely understand someone not having a lot of money for a ring, especially in this economy. That being said though, why couldn't he save up for a long time in order to afford a better one? I mean, if he truly doesn't care or understand about the ring then that's fine, but once he's been told that it does matter to her, he should take the other back then save for something nicer, instead of accepting money from you for it..Is your friend pushing him for engagement and marriage and being impatient during the process or was the engagement his idea?
Also, if he doesn't even have the money for a ring, why on earth is your friend going wild in planning an extravagant wedding that he is also supposed to pay for? Does she not know about his financial situation and that's why she wants a designer ring and a big wedding with favors, etc.?
It just doesn't add up to me. If they have really tight finances then I understand the ring thing but then they should have a very paired down wedding.
Perhaps as her maid of honor you should talk to her about being realistic in her expectations for this wedding, because going into debt or causing a lot of financial stress over it is not a good way to start a marriage.