Shadowdude, that must have been a pretty scary experience for your friend. The only thing remotely resembling that I've ever experienced was as a very small child. I have a distinct recollection of two figures, seen only in silhouette form, that seemed to have a glowing red aura around them.
That has always been a very puzzling memory for me, and like I said, I was very young when it happened. To this day, I don't have a clue as to what, if anything, it signified.
I see that you are in Australia -- you might want to check for books regarding myths, legends and ghost stories in your area and see if anything rings a bell. Good luck!