My friend has made a decent income online. I was wondering -- if someone tried to sue him, could they have access to the money he paid for his condo? His car? The money in his bank account? He has an S-Corp... but what does this really mean? Should he set it up in Nevada? OR is the Nevada Corp stuff a myth?
he can incorporate his business as a limited liability company. The actual procedures depends on the country you are in.
Yes, there are ways to protect personal assets such as that. However, don't be fooled by the notion of being protected by the corporate veil. It has been known to be pierced by the courts in circumstances where the proprietor isn't acting at arms length (sharing bank accounts with the business, etc). Best to talk to an attorney. It's possible, but it requires more than just a signed piece of paper, it also requires some different practices that limit personal liability.
An individual can protect his personal assets by incorporating or by organizing a limited liability. However, particularly with a business where the owner is also active in the business, there are a number of legal theories under which a creditor could attack the owner's personal assets. So the protection is real, but not completely foolproof. For more information, you can read the article How Limited is Limited Liability? which discusses some of the ways that a business owner can be held liable despite having a corporation or LLC.