Either you don't have CS5, they have CS5.5/CS6 or the file is corrupt.
Either you don't have CS5 or your friend do not.
Perhaps they have CS5.5 instead -- yes that is another major version. Or even CS6, the Official Latest and Newest.
Ask them to export their file as IDML (and also ask if they used any brand new feature of 5.5, because those will be lost if you open their document).
Ok, mystery solved, they do both have CS5.5. It's just that the files were not telling us that and they were not looking close enough to tell me they had 5.5 rather than 5.
It's a real bummer that my software is only a year old and already two steps out of date.
Thanks Jongware, we are able to use the IDML file conversions to share files.