That's an outstanding camera. The only limitations you'll find are that in low light it will be difficult to get action shots. But other than that, the SX 260 will make him/her very, very happy.
Don't worry about mp (megapixels). That should have nothing to do with your or his decision. All the current cameras from all the manufacturers are adequate in this area. From nine to sixteen....doesn't matter. It's all good.
What you want to consider is which camera can do the most in your budget category, and for the 200-300 dollar budget range, you'll be hard-pressed to find a better point and shoot than the Canon SX 260 IS.
The image stabilization works, and the zoom is ridiculously good. You can geotag the photos so that you can remember exactly where it was taken (if that's important to you), and that's about it.
Put it this way: For 300 bucks, you won't find many people complaining about the SX 260. Ask anyone who owns one and they'll say the same thing: It rocks.
Now, for $149 Best Buy is selling the SX 150 IS, which is just about as good as the 260. The 150's main advantage is that it takes two AA batteries, which means you don't ever have to recharge the camera battery. You recharge the batteries separately while a fresh set is in the camera. In other words, your camera is never down for charging. Just get high-quality rechargeables (the best you can get are Sanyo Eneloops...Best Buy has them).
The only negative of the SX 150 IS is that it is thicker than the 260 and, therefore, doesn't fit in the pocket as well. It will fit fine in loose pockets (cargo shorts, pants, etc.), but not a small, tight pocket like jeans.
The benefit of the SX cameras is that they can be put into fully manual mode so that you can choose what goes on.
Olympic sports tend to be fast-paced, wouldn't you agree? So, why trust the cameras that only have auto-modes to get the shot of the string release, the platform dive, or the soaring shuttlecock (can I say that online?) 
TV mode at sporting events is your friend. Set it at 1/400 or faster and fire away.
By the way: your "friend." Is it like when someone goes into a pharmacy and says, "my 'friend' has a rash on his butt." 
I kid, I kid. I have a few friends who are olympians. I worked with Benn Fraker's mom (she's a teacher...he is doing single-man canoe slalom).
I also know Mary Meagher (three-time gold medal in the Los Angeles Olympics and one bronze in Korea....swimming).
My personal sport, twelve-ounce curls, has consistently been denied, and it's because they know I would easily beat everyone, including the Germans, and that would be an international scandal for them. Politics can really ruin a good sport sometimes.
Thank you. 