We knew a girl at school that we suspected did this.
When we still used myspace, she uploaded pictures of her 'friends' from outside of school and one of her 'boyfriend' but there was only one photo of each person and none of them were in photos together or with her, none of them seemed to have their own myspace page and the photos all looked very posed and photoshopped and perfect, as though she'd just got them from google.
We did ask to meet the boyfriend but she'd always make excuses and when we started pressing her on it, they suddenly broke up and we never met any of the friends either.
Then when we got facebook, she was friends with one or two facebook profiles that commented on /everything/ she posted and had no photos or information up and we suspected that she made them just to make herself look more popular because she was really difficult to get along with and was always causing arguments so even though she hung out with us, she didn't really have proper friends.
We all thought she was crazy and it just made it even harder for us to get along with her because she was lying to us as well as causing arguments.
I would tell your friend to delete the profile, it'll make her look bad when the truth comes out and unlike the girl I knew, she did kinda have a reason behind why she did it but there's a chance people won't see it that way and will just think she's insane.