Minecraft Pocket Edition server logging in error

Your friend has the lite version, as you stated above.

The Minecraft Pocket Edition wikia says:

The multiplayer mode is cross-platform compatible between Android and iOS, but not Demo/Lite with Full version

Basically, both of you need to have the Full version in order to play with each other. Or you could both use the lite edition .

I'm assuming you're on a multiplayer server.

To get past this, you have to type "/register", then a space, followed by any password you'll remember. Once you do that, it'll say "you have been authenticated", and you're free to (metaphorically) run naked in the rain, which is actually rather overrated. You'll have to do this again for every different server you go on that asks you to do this. When re-joining, it'll ask you to login, so you do the same kind of thing, typing "/login", a space, and the password you typed in last time. After that, you can move around and do whatever.

If this is single-player, then I have no idea what the hell is going on, and that is something for Mojang to answer.

Hope this helped.