Tawassul in Arabic means seeking to draw close. Allaah says in the Quraan (interpretation of the meaning): [they] desire means of access to their Lord [al-Isra 17:57], i.e., means of drawing close to Him. There are two types of Tawassul, correct Islamic tawassul and forbidden tawassul.
Correct Islamic tawassul:
This means seeking to draw close to Allaah through acts of worship which He loves and which please Him; these may be waajib (obligatory) or mustahabb (encouraged), and may take the form of words, actions or beliefs. Some types are as follows:
Seeking to draw close to Allaah by means of His names and attributes. Allaah says (interpretation of the meaning): And (all) the Most Beautiful Names belong to Allaah, so call on Him by them, and leave the company of those who belie or deny (or utter impious speech against) His names. They will be requited for what they used to do. [al-Araaf 7:180]. So when a person makes duaa to Allaah, he begins by calling on Allaah with the name that is most apt, such as al-Rahmaan (the Most Merciful) when seeking mercy and al-Ghafoor (the All-Forgiving) when asking for forgiveness, and so on.
Seeking to draw close to Allaah by means of faith and Tawheed. Allaah says (interpretation of the meaning): Our Lord! We believe in what You have sent down, and we follow the Messenger, so write us down among those who bear witness (to the truth). [Aal Imraan 3:53]
Seeking to draw close to Allaah through righteous deeds, whereby a person asks Allaah by virtue of the best deeds that he has done, such as salaah, fasting, reading Quraan, avoiding haraam things, and so on. An example of this is the saheeh hadeeth narrated in the Saheehayn about the three people who entered a cave, and a rock fell and blocked their way out. They asked Allaah by virtue of their best deeds (to save them). A person may also ask Allaah by virtue of his total dependency upon Him, as Allaah mentions in the Quraan (interpretation of the meaning): [Ayyoob said:] Verily, distress has seized me, and You are the Most Merciful of those who show mercy. [al-Anbiya 21:83]; or by admitting his own wrongdoing and his need for Allaah, as Yoonus is described as saying (interpretation of the meaning): None has the right to be worshipped except You (O Allaah). Glorified (and exalted) are You. Truly I have been of the wrong-doers. [al-Anbiya 21:87]
The rulings on Islamically correct tawassul vary according to its type. Some types are waajib, such as seeking to draw close to Allaah through His names and attributes and through Tawheed (believing in His absolute Oneness), and some are mustahabb, such as seeking to draw close to Him by virtue of all kinds of righteous deeds.
Tawassul that is bidah and therefore forbidden:
This is the attempt to draw close to Allaah by means of things that He does not like and that do not please Him, whether they be words, deeds or beliefs. One example of this is trying to draw close to Allaah by calling on the dead or people who are absent, asking them for help, and so on. This is a form of major shirk (shirk akbar), which goes against Tawheed and means that a person is no longer considered to be a Muslim. Calling upon Allaah, whether it is for a purpose such as asking Him to grant some benefit or to ward off some harm, or as an act of worship to express humility and submission before Him, can only be addressed directly to Allaah. If duaas or prayers are addressed to anything or anyone else, this is shirk. Allaah says (interpretation of the meaning): And your Lord said: Invoke Me (and ask Me for anything), I will respond to your invocation. Verily! Those who scorn My worship [i.e., do not invoke Me and do not believe in My Oneness], they will surely enter Hell in humiliation! [Ghaafir 40:60]. In this aayah, Allaah explains the punishment of those who arrogantly refuse to call on Allaah, whether they call on someone other than Allaah or they do not call on Him at all, out of pride and self-admiration, even if they do not call on anyone else.
Allaah says (interpretation of the meaning): Invoke your Lord with humility and in secret [al-Araaf 7:55]. Allaah commands His slaves to call on Him and not anyone else.
Allaah says of the people of Hell (interpretation of the meaning): [They say:] By Allaah, we were truly in a manifest error when we held you (false gods) as equals (in worship) with the Lord of the Worlds. [al-Shuara 26:96-97]
Anything that results in equating something other than Allaah with Allaah in worship or acts of obedience is shirk, the crime of associating partners with Him. Allaah says (interpretation of the meaning): And who is more astray than one who calls (invokes) besides Allaah, such as will not answer him until the Day of Resurrection, and who are (even) unaware of their calls (invocations) to them? And when mankind are gathered (one the Day of Resurrection), they (false deities) will become enemies for them and will deny their worshipping. [al-Ahqaaf 46:5-6]
Allaah says (interpretation of the meaning): And whoever invokes (or worships) besides Allaah, any other god, of whom he has no proof, then his reckoning is only with his Lord. Surely, al-kaafiroon (the disbelievers in Allaah and in the Oneness of Allaah) will not be successful. [al-Muminoon 23:117].
Allaah states that anyone who calls on anything other than him is taking that thing as a god, as He says (interpretation of the meaning): And those, whom you invoke or call upon instead of Him, own not even a qitmeer (the thin membrane over a date-stone). If you invoke (or call upon) them, they hear not your call, and if (in case) they were to hear, they could not grant it (your request) to you. And on the Day of Resurrection, they will disown your worshipping them. And none can inform you (O Muhammad), like Him Who is the All-Knower (of everything). [Faatir 35:13-14].
In this aayah, Allaah explains that He is the only One Who deserves to be called upon, because He, and no one else, is the Sovereign who is directing everything. Those things that are worshipped cannot hear duaas, let alone respond to the one who invokes them, and even if they were able to hear, they cannot respond, because they do not have the power to either benefit or harm.
The mushrik Arabs whom the Prophet (peace and blessings of Allaah be upon him) was sent to call were disbelievers because of this shirk. They would call upon Allaah sincerely at times of difficulty, but they became disbelievers at times of ease and plenty, when they would call on others besides Him. Allaah says (interpretation of the meanings):
And when they embark on a ship, they invoke Allaah, making their Faith pure for Him only, but when He brings them safely to land, behold, they give a share of their worship to others. [al-Ankaboot 29:65]
And when harm touches you upon the sea, those that you call upon besides Him vanish from you excpet Him (Allaah Alone). But when He brings you safely to land, you turn away (from Him) [al-Isra 17:67].
till when you are in the ships and they sail with them with a favourable wind, and they are glad therein, then comes a stormy wind and the waves come to them from all sides, and they think that they are encircled therein, they invoke Allaah, making their Faith pure for Him Alone [Yoonus 10:33]
The shirk of some people nowadays goes even further than the shirk of people in the past, because they direct some acts of worship to something other than Allaah, calling upon them and asking them for help even at times of distress; laa hawla wa laa quwwata illa Billaah (there is no strength and no help except in Allaah). We ask Allaah to keep us safe and sound.
To sum up our response to what your friend mentioned: asking the dead for anything is shirk, and asking the living for anything that no one except Allaah is able to do, is also shirk. And Allaah knows best.