Sounds like you're going to be doing an Olympic distance triathlon, which should be a 1,500 meter swim, 40K bike (24.8 miles), and then a 10K run. If your friend weighs 200 lbs and can do about 2:30, you are toast, unless you are an incredibly gifted athlete. Triathletes of that weight, that can do a 2:30 to 2:40 Olympic distance tri, are doing it on the strength of the swim and bike, not typically the run. So maybe you can make up your huge time deficit with a sub 37 minute 10K to his 55:00.
Swim:
Unless you are a very smooth swimmer, the fact that you can only swim .5 miles right now means if you swim every other day, and build up the ability to go the full 1,500 meters, you will probably still be too exhausted to pull off your wetsuit (please tell me you are renting a swimming wetsuit, not a surfing one), much less get on a bike, so you could blow 10 to 12 minutes in the transition vs your friend's 2 minutes. So if you can finish the swim in 40 minutes, your friend will probably out swim you by at least 10 minutes, so as you get on your bike he could be 20 or more minutes ahead of you already.
Be sure to do some open water swimming before race day or you may get a panic attack and need to be pulled from the water, race over. God, I hope this is a lake and not an ocean swim where you'll have to get past the breakers (Twice, first going in, and then, when you're tired, coming out. Plus you’ll have to deal with ocean currents. You would be smart to get a real swimmer to help you with your stroke technique. Since you already know how to swim (what does that really mean?), hopefully a few stroke drills (which you will practice every time you get in the water) will improve your swim time, probably even more than a crash swim-conditioning regimen.
Bike:
You are borrowing a bike. So you really don't know how to bike for speed or economy. Is it a road bike? If not, your friend will pull another 20 to 30 minutes ahead of you. Get your hands on a road bike, hopefully with bike shoes that clip onto the pedals. At least get one with the toe holders that you can slip your feet into - if you go that route you'll pick up a minute in the next transition not having to change to running shoes as you can wear them while you bike. Still, you will be much faster with real bike shoes. And you will not be doing 40K anywhere close to 1:10. More like 1:30 to 1:45. Your friend might be in the 1:10 range if he’s really good. Guys his weight are usually strongest on the bike, unless they were high school or college swimmers. And then they are still pretty strong on the bike.
For training, ride every other day (alternating with your swim days), about 15 to 30 miles, then hop off your bike and immediately run two to three miles. The big shock you are not expecting right now is that you can't run right after you do a hard bike ride. Your legs will be rubber, and it will seem like you have forgotten how to run. You have almost no time to acclimate to this, so run after every ride. Then in the race, start slow, take very short strides, and slowly build your running pace. Hopefully you will be running close to 6 minute pace by the second or third mile.
Run:
Hopefully your 35:30 10K time is recent, and you have a good strong base, because you will need to make up an awful lot of time in this last segment. Now is where you get to prove how tough you are. In order to have any chance to pull this off you will need to spend your time and energy focusing on getting smooth, balanced and efficient in the water, strong on the bike and at least somewhat used to the bike-to-run physical shock. You should be able to maintain enough of your run sharpness with the runs you do after the bike rides.
Transitions:
You will be so tired each time you come into the transition that you will probably forget what to do. If not, then you’re not pushing yourself hard enough and you will loose. So plan out everything you have to do, in the order you need to do it, and memorize it. Make sure you have counted the bike racks from where you enter T1 from the swim to where your bike is racked so you can find it right away. Go to beginner triathlete dot com and look at some of the video clips such as this on T1,
http://www.beginnertriathlete.com/cms/article-detail.asp?articleid=1820
. You will find more on youtube.
And…
If you feel an injury coming on, stop immediately. Do not try to train through an injury; you have no time to recover. Ice your sore muscles multiple times each day. Even better, also take an ice bath every day right after your warm-down. Get a sports massage in the next few days, and again about 3 days before the race. Get 8 to 10 hours of sleep each night. Definitely take two days off before the race.
If you get a leg cramp during the race, stop, and then massage it in the direction of the muscle fiber. Next, stretch it gently, and continue to massage it until it’s gone. Then proceed by easing slowly back to race pace.
Finally:
If you manage to pull this off, you are one fine athlete and you will always be able tell your friend (and anyone else who will listen) that he is one tough guy, but he’s not in your league. If you loose, you should man-up and tell him the experience has humbled you, and that you have a newfound appreciation for what he can do. If he mops the floor with you, change your name and move out of state, as you will never live it down.
Good luck.