Clutch or Transmission?
 

My friend recently acquired a 2000 Mustang GT with the 4.6, the car has been fine other than he was learning manual on the car and I think he burned the clutch up. It drove fine for the 4 and a half hours that I drove it home, clutch worked fine and everything was good. He drove it for about a week and told me that he smelled a burning smell, (which smells kinda like clutch) and when I went over to check it out we tried to take it for a drive and it wouldn't move. Its a 5 speed manual, and in every gear we can let out the clutch completely and the RPM's stay the same and the car doesn't even think about moving even in reverse. He followed me somewhere a couple days before and I could hear him revving it up to about 2500 RPM's and letting the clutch out really slow. So my question is being new to working with clutches and manuals, what did he damage? Thanks.

Most likely burned up what was left of the clutch disc from slipping the clutch like he did for so long. It's not damage, it's wear-and-tear. A clutch wears out just like brake pads and needs replacing. How long? Really depends on driving habits. If you ride the brakes (like slipping the clutch) you'll wear out the friction material faster and require a replacement sooner.

I believe there is an inspection plate under the car (on the bellhousing) that can be removed so you can stick a flash light in there and look at the condition of the clutch.

Sounds good. We will check out the inspection plate. What should we be looking for?

where the clutch cable goes into the bell housing, there's a thin rectangular metal cover held on with a single bolt. Remove the bolt and pull the cover off to get a view into the bell housing and the clutch. It's under the car and on the drivers side.

You can also inspect the clutch fork and cable to see if anything looks broken.