Ok first thing, you DO NOT need to update the System Menu if your comfortable with how it is now [anyways the new 4.1 and 4.2 system menu only allows you to play VC/WiiWare games directly off SD (other than the Triforce mod, that you'll have to study on your own since I have yet to do this)]
The only thing that needs an occasional install are the IOSs, you can find a great guide on what they are and what they do here: http://www.wiihacks.com/recommended-...explained.html
Exactly right about the NAND backup [but again other than the triforce mod does this come into play again]. It's just a way to sorta "re-format" the Wii back to original state of when you made the backup. Preloader is actually your best "brick protection" as it prevents any unecassary disc updates among other great pre-measures.
And the process could differ from what steps your buddy took to mod it. The scene can change drastically at times, so there are new exploits found that ,make the modifications easier and easier. But it can be a double edged sword cause with Nintendo Official updates they are always trying to plug holes. But eventually a way around those plugged holes is found.