I got a iphone from my friend and when i try to install a app, it says that i need to type in my account password. I was wondering how do i get rid of it, or does my friend need to get rid of it.
Sounds like you need to setup the phone with your own Apple Store/iTunes account. A factory reset will help with this, but you will lose everything that was installed on the phone, after it was first taken out of the box.
If your friend still has an active Apple Store/iTunes account, you will NOT be able to use any of his paid apps.
So what I would do if this were me. I make a note of all the apps on the phone I was interested in. This do a Factory Restore of the phone and set it up as my own at that point, creating a new Apple Store/iTunes account Then download all the apps you were interested in.