What happens if you select the font and actually try to set type?
Thanks for the reply Peter.
I was able to fix 1 of the 2 problems. The font did in fact have some extraneous language entries in it's name table. I was able to edit those out and now the font sorts in the normal font list, and not in the Arabic font category.
But the font preview feature in the font menu is still showing boxes (instead of characters.) This is where it gets weird... if I go into Preferences and change the Font Preview size from Medium to Small or Large it works correctly. Just not with Medium (the default.) I've tried clearing font caches, etc, but I could at least live with small or large font previews in order to use the font with CS6.
To answer your question, the font does work correctly when setting type; however, if Font Preview is on the font will eventually be automatically disabled and drop out of the Font menu. Relaunching InDesign CS6 brings it back. Turning off Font Preview prevents this from happening.
I wonder what is different in CS6. Other apps work fine with this font (including CS4.) Even apps like Pages that also have font preview in their font menus.
You really should talk to your friend about this. Each version of ID seems to get fussier about how fonts are built.