ITunes most definitely recognizes MPEG-4. Apple's Quicktime is an implementation of the MPEG-4 part 2
standard. But MPEG-4 is an evolving standard that encompasses a number of different implementations including DVD-HD and Blu-Ray (MPEG-4 part 10
). ITunes is dependent on Quicktime and therefore it is not capable of handling Blu-Ray. For that you would need something like Toast 11 Titanium. If you were going to burn a disc you would also need a Blu-Ray capable burner, and Apple's Superdrive is not Blu-Ray capable either. So you need more details about your friend's file and possibly additional software and hardware to burn it to a disc.