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Your buddy is a fool!!!! Sorry but true!!!
Your trans will take 21-24 quarts to do a proper flush. I have posted the how to several times on this forum. Your trans should only take Mercon/Dexron III , you won't find this on any label in the store since they supposedly stopped production in 2007, at least Ford won't let them use Mercon in the title. Napa sells a "ATF" fluid that is still the good ole Mercon/Dexron III, it is made by valvoline and is good oil. No need for synthetics unless you tow heavy the majority of time.
The transfer case will take (IIRC) R quarts, now here you can use Mercon V and here I would use synthetic, same as with the Power steering fluid which will take 3 quarts for a flush, also posted the how to on this one several times.
Your diffs will vary depending on what truck you have, if you have LS don't use any fluid with additive already in there, Ford calls for 8 oz of modifier, this is why their LS gets a bad rap. Add 3 oz and do some tight figure eights, if you hear chatter from the pumpkin, add another oz, repeat until chatter stops and your LS will work as designed.
I would also flush the brake fluid, will take about 3 1/2 quarts.
For the cooling system do a proper flush and use Fleetrite ELC, if you want the best. You will also need 24 gal of distilled water. How to been posted several times as well.
Hope this helps
NCH
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