First, Red is not the normal background color for this system to boot-up with or without a drive with Mac OS present (blinking ?), it should be light grey.
You stated you tried the original systems disks (plain gray) or where they black Apple OS9 or OS-X logo'ed disks? It's possible you didn't have the correct system disks to boot this system. It's also possible the CD/DVD drive was not correctly reconnected to the logic bd.
In any case the HD is not working. Either he couldn't install the OS from the disks he had, or the drive is not installed correctly (or still bad). It's also possible the HD & CD/DVD logic on the main logic bd is fried.
I suspect you have some video issues here as well (that dam red screen) it could be just a loose wire. The fact your getting the question mark is a good sign as that means the system still has life.
The question I would ask your friend is who tried to replace the HD as I think they didn't know what they were doing. They could have blown the logic bd. and/or didn't put things back together again correctly.
This is a PowerPC (PPC) system (not Intel based) so most newer software won't run on it. Theres still a lot of stuff out there that does run on this system (used) so it might be a good system to start off with if you have a tech geek friend that can help you one on one.
In any case I wouldn't spend very much as it might not be repairable.