There are no people. It means there are 0 people. There are no cows here means 0 cows here. Same thing with "There aren't any people here" - 0 people. But if you say "It's not empty here" - means there's something/someone here. You use "are" with people. Use "is" with person or someone. For example: That person is happy. The people are happy. Someone is happy.

Your friend probably knows something of the rules of logic, and is trying to apply them to that sentence. His argument is that the sentence is equal to - The number of people is not zero, therefore there must be somebody there. Actually, it simply means nobody is there. Zero. It reminds me of Alice Through The Looking Glass by Lewis Carroll: "I saw nobody on the road," said Alice to the king. "I only wish I had such eyes," said the king. "To be able to see Nobody! And at that distance too!"

Julie answered so well. I might add: "There are no helpful answers." "There is no single answer that was helpful." "There is not a single person that can help me." "There was a person who helped me." Of all the people, there is only one who answered well." "Julie, and Jmat, and Bruce are the people who answered my question." "Julie is the person who gave the most helpful answer." "There are people on Italki who give answers." "I hope there is a person who can answer." "There are people who will usually answer."

You can't ever use 'is' with 'people' because 'people' is plural. The only reason I said "...'people' is plural" is because I was talking about the word itself (thus the apostrophes).