He's talking rubbish. When copying a movie on DVD, and the video on the DVD has to be transcoded (or re-encoded) because of a lack of space on DVDR, there will be a loss of quality. How big this loss of quality is, differs from invisible to too much. This depends on quite some factors: encoder of the original disc, duration of the disc, main movie or complete copy, number of sound streams etc etc.
In general, it's possible to make very good copies of DVD movies. Although it takes some practicing to make nice copies, your friend sure is talking rubbish!