No, the typical Ubuntu installation uses the
ext file system, in case of 10.04, it was
The default file system for installations of Ubuntu 10.04 LTS is ext4, the latest version in the popular series of Linux extended file systems. ext4 includes a number of performance tuning changes relative to previous versions such as ext3, the file system used by default up to Ubuntu 9.04.
Unless your friend encrypted the drive on purpose, there was no encryption involved. Ubuntu 10.04 offers to encrypt the home folder, but it's something you have to choose to do (see the "… decrypt my home folder" option):
They probably tried to mount the drive in Windows, and due to Windows' missing native support of ext filesystems, they probably thought the drive was encrypted, as they couldn't see anything.
If they really want to read it, they'd probably need to look at this SU question: Does a ext4 reader for Windows exist? – or just mount the drive in a *nix machine.