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In short, the only negative aspect of the 18-55mm kit lens is the limitations of the focal length, especially if this is the only lens he possesses.
The 16-85mm VR is better in the sense that it would give him more width but the 85mm is still lacking in the telephoto department. If he's into landscape photography, then this isn't really going to be an issue and 85mm is a still decent portrait length. If he's looking to get into wildlife photography, airshows or things of that nature, then its not going to be particularly suitable.
The 18-200mm VR, as you mention, is a very popular general purpose lens because of the focal range it covers but again, it doesn't come cheap at £550 for the new VRII. Although it would be nice to have an all-in-one lens like the 18-200mm VR, I'd be tempted to keep the 18-55mm and use it for landscape and close portraits and just get a 70-300mm VR, which is a highly regarded lens and has the extra 100mm pulling power.
Without knowing exactly what type of photography your friend does or is looking to do, its impossible to give a good alternative suggestion though.
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