If this person really knows nothing and he still can hold his position in company. Then it is possibly:
1. His position is negligible to the company.
2. His company is losing money every year.
3. He have other good points which are vital to the company.

3 will be the common case: If this person got good presentation skill so that it can build good image to the customer, or the person have good management skills and the company is benefiting from his task arrangement. He can also be a valuable person to the company. In my previous company there is a manager who knows almost nothing about network, but he is a good manager because he is able to satisfy the customers and make internal communication smooth as well.

Anyway, I think you friend is good in techical issues, but his colleagues may be good at some other areas as well.

Try to discuss this issue with you boss and see what's his opinion. You can even volunteer to be the project coordinator.

When you have a good idea or accomplished a countable part of the project, just email to your colleague and cc your boss.

Practise your presentation skill and do well when you are presenting in project meeting or to the customer.


...

There are a lot of positive methods to deal with this. Never try to resolve this problem with your personal integrity as trade-off