I argued with my friend that the Command Prompt is just a GUI version of MS-DOS which works in the Windows forms environment. He totally disagrees with me.
Who is right?
This was true once, but it isn't anymore.
So no, in every Windows from the NT family (e.g., XP, Vista, 7, 8), the command prompt and MS-DOS are visually similar, but quite different.
They are different things - The Command Prompt is Not MS-DOS - but as far as the user is concerned they could be the same thing as they do the same things.
So it depends on your point of view. From a technical point of view your friend it correct, but from a user perspective you are correct (sort of as there are differences that an expert would spot).
From what I understand, MS-DOS is the disk operating system that Microsoft released. The command prompt is a non-graphical interface that allows you to interact with your operating system.
Command Prompt is a command line interpreter application available in most Windows operating systems, officially called the Windows Command Processor but sometimes called the command shell. Command Prompt is a Windows program that emulates many of the command line abilities available in MS-DOS but it is not actually MS-DOS.
Command Prompt is a GUI version of command.com in MS-DOS. cmd.exe is a native Windows application usually running in a Win32 console. This allows it to take advantage of features available to native programs on the platform that are otherwise unavailable to DOS programs.
For example, since cmd.exe is a native text-mode application on OS/2, it can use real pipes in command pipelines, allowing both sides of the pipeline to run concurrently. As a result, it is possible to redirect the standard error in cmd.exe, unlike COMMAND.COM. (COMMAND.COM uses temporary files, and runs the two sides serially, one after the other.)
In reality, cmd.exe is a Windows program that acts as a DOS-like command line interpreter. It is generally compatible, but provides extensions which address some of the limitations of COMMAND.COM (above explanations are referred by Wikipedia).
Your friend is right. MS-DOS is/was an Operating System (Microsoft Disk Operating System is what the acronym stands for.) The UI for DOS is called a (the) command prompt.
The first few versions of Windows ran on top of DOS (making them technically operating environments, though I'm not sure anybody makes that distinction anymore), but later OSes, starting with the NT Kernel, didn't - DOS was gone.
However, people still needed the functionality provided by the command prompt, and instead of command.com we got command.exe (and these days cmd.exe), which when run gives us a command prompt.
But, that's not the only (nor anywhere near the first) command prompt that people have used. Command Prompts are also called Shells, and Unix has many, and the commands are different and often very powerful. Speaking of Power, Microsoft has created a new command prompt for Windows called PowerShell which is incredibly powerful and interesting. See Wikipedia for more: http://en.wikipedia.org/wiki/Command-line_interface#Operating_System_Command-Line_Interfaces
(Unless your definition of equality does not extend past »It is a text interface and I can run programs from it.«)
What is run when you click Command Prompt in the Start Menu is the Windows Command Processor, a.k.a.
Things were different in Windows 95, 98 and ME where
In any case, even
Inside, I actually cringe each time I see people referring to a window with gray-on-black text as MS-DOS. In the vast majority of cases they don't actually know what they're referring to.