4.2GHz is at the very high end of how fast that processor can overclock and still function. At that speed you need a good water cooler to keep your core temp low enough so that you don't fry that new i7 950. If your overclock is not entirely stable, Windows may load just fine but as soon as you run a program such as a game you are pushing the cpu to work harder and hotter which may cause errors, your system freezing, or the dreaded BSOD! My i7 965 maxes out at 4.2GHz with a core temp of 83 degrees C under load and a Vcore of 1.5V. Even with my water cooler, this temp is too hot(68 degrees C under full load is intel spec for the i7 900 series processors). The general opinion seems to be mid 70's is about as hot as you should run. I would not go much higher if you want to get any longevity out of that chip. Also, the max allowable Vcore according to Intel is 1.375V and they state that any higher and you may cause permanent damage to your cpu. If you are close enough with this freind, it would be a good idea to ask him/her to help you downclock a bit. If not, then you need to go into the BIOS and reduce the BCLK frequency. Without knowing exaclty what your system is and how your BIOS is set I am only guessing at these numbers so please bare with me.
For example, with a bclk(base clock frequency) of 200 and a multiplier of 21 your cpu will run at 4.2 GHz. You can either reduce the BCLK or the muliplier to reduce cpu speed. Your RAM uses that same BCLK but it has it's own muliplier. For example, 200 x 8 will set your RAM to run at 1600MHz. IF you reduce the BCLK you will also need to play with the RAM mulitplier to get your RAM speed back to stock. The default Bclk for that processor is 133MHz with a multiplier of 23 gives you 3.07GHz( with turbo on max multiplier is 24 x 133 = 3.2GHz). Increasing the BCLK also overclocks the QPI(quick path interface) which means that your friend had to also increase some other voltages in the BIOS such as qpi/vtt which adds more heat to the processor and another factor in the equation which causes instabillity. There is no manual to say exaclty what settings need to be at exaclty what level in order to overclock succesfully. It is trial and error. Two identical systems may require slightly different numbers to acheive the same speed. If it were me, I would clear the CMOS which resets the BIOS back to factory settings and start over. If you do this just make sure that you enter the proper RAM settings into the BIOS after you clear the CMOS. Everything else will run at 'auto' but improper RAM timings may cause you more headaches. This info is on the sticker on the RAM. If you want to test your system stability try prime95. It is a very small program and it is free. If your system crashes right away then your overclock is unstable. You MUST use a program such as Core Temp to monitor your core temps also since prime95 is a stress test tool and will run all cores of your processor at 100% and you will need to PAY CLOSE ATTENTION to the temps since they will rise fast and you may need to shut the test down right away to avoid causing damage. At stock speeds you can run prime95 for days without any issues but IMO 4.2GHz is and extreme overclock for that processor. I have an i7 965 and still have my old i7 920 which I have spent way too many hours trying to overclock.
**edit**
Forgot to answer your question. Yes it is overclocked
Here is an i7 overclock for beginners. This gives you the basics with some screen shots of the BIOS which should help you in downclocking also.
http://www.clunk.org.uk/forums/overclocking/22106-core-i7-overclocking-guide-beginners.html