会う uses に to mark who you are meeting, so you would use 友達に会う to mean "meet a friend". に has many meanings beyond place, in this case it's more like the goal. 会う is an intransitive verb, so you can't use を. With japanese verbs, it is a good idea to use a dictionary that has example sentences. There are some verbs with very odd particles. wwwjdic is a good online dictionary with examples - http://www.csse.monash.edu.au/~jwb/cgi-bin/wwwjdic.cgi?1Q%B2%F1%A4%A6_1_

友達に会う should be the correct answer since と is used when you do actions with people, for example 友達といっしょに行きます (I'm going together with my friend) Everything else has been explained by Al already. ^^

友達と会う this expression is correct. と means "and". に means place, and を means the relationship between subject and verb.