I think the best time to take the exams will be July-Aug this year if your friend is aiming for Fall 08. As drhowarddrfine said, deadlines for most of the colleges for this Fall have already passed.
2. Should he apply to the colleges before the exams.
Usual practice is that students prefer to give GRE before applying to colleges. This is recommended since your GRE score "may" play a significant role in deciding the universities/courses you apply to.
3. Can he get any scholarship , if so How?
Scholarships are available in various forms. It depends on which University/Course your friend is applying to, his qualifications, background, any research work etc. Funding may be in the form for RA, TA, tuition fee waiver etc. However not all that apply for these scholarships, get one.
You may want to check edulix.com forums. It has some of the excellent resources related to GRE/GMAT.