A friend of mine loves Ubuntu with Gnome, but doesn't want to install it (yet) and doesn't want to use wubi. When I used unetbootin to put an Ubuntu iso on his 2GB usb stick, it worked, but it didn't save anything.
If your friend simply wants to try Ubuntu, your friend can use a Virtual Machine. Two well known examples are:
These act very similar to how you would expect an operating system to work, though you may find a few issues with functionality, including, according to some people, a lack of WiFi.
The alternative is to follow these instructions on how to run Ubuntu via his pen drive. This will be more inline with what you are trying to achieve.