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I'd let him down easy, I'd say, "I dont really want to sell this one but, I saw one in the gun trader or whatever the other day". help point him in the right direction. Maybe find a few examples to give him. Help him with his first handgun.
If you do the deal, make sure you get your TOTAL COSTS of a new XD covered. (If they sell in your area for $450, get $500 to cover tax, paperwork, etc.) No need to try and 'get over' on a buddy but doing him the favor shouldn't end up costing you anything either. An HS2000 is not a collectors piece. It's not like 1911Tuner losing a gun that had a ton of style, probably some sentimental value and, if not now, maybe eventually, some "collectability".
As long as he is what you say he is, don't read too much into it. Look at it in basic terms: Would you trade a used HS2000 for a brand new XD9? I would.
We all like the idea of unpapered guns, but buying a first gun is something that everyone needs to go through.
My dad went with me for mine and helped me fill out all the paperwork and stuff. It was just better to have someone with me the first time to sort of help walk me though the whole thing.
I would keep the gun and help him find another.
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