O-scale is roughly, not exactly, twice the size of HO. If it was just a little bigger than HO, you'd be looking at OO-scale which is 1/76. That is definitely a very popular British scale. O-scale is 1/48. I think Jim you're confusing the two.
Here is a pic showing different scales. The O scale and N scale car are Atlas while the HO is an old Walthers kit which is less detailed then current cars.
I don't know much about O scale models but I do know friends like you are hard to find. The other question to think about is how is your friend going to enjoy this hobby? If this locomotive is to sit on a shelf, then the bigger the better. If you believe this is the seed of a future layout, well then real estate becomes a more critical issue. A large O locomotive like you are looking for requires a lot of property to run on. Also if he won't spend money on the hobby now, will he spend it on a layout to run your gift? Just other things to consider.
Thanks for the pictures, now I have a frame of reference. I take it you collect all three scales!
As for being a good friend, he's been better, so this would be a nice reward. It won't sit on a shelf, he'll definitely expand on it over time; he has a whole basement to play with. He'll add to his own collection, but I plan on setting something up with his other friends to make contributions to his collection every year for his birthday or xmas.