There is a possibility that the image was corrupted and lost data or he didn't create it properly in the first place. Let's hope that isn't the case.
Are you saying that all he sees is two folders, Desktop and Library? Nothing else in the user folder? OR are you saying all his Applications, etc. are missing as well?
If the former, tell him to open Disk Utility and from there access his sparse image and run verify/repair disk on it.
If any repairs are reported then mount the image and see if it has the missing items.
If the latter he may have to startup from another drive, connect via FW and use a data rescue program to find the files. In this case the less he uses the computer the better chance of recovering files.
Oh, welcome to your first post at TS!
