Does my friend like this guy..and what should I do about it?

I would ask her about it. Don't be confrontational, but just say something like she told you that she didn't like him but that's not the feeling you got when you were all together. There's no sense in avoiding the subject, just ask her if she still feels the same way. As far as talking to him, I wouldn't worry about it. She told you it was cool so, if you are still interested, I say continue talking to him. If it turns out that she does like him or she starts acting jealous or anything, then you may have to decide what is more important (being with him or having her as a friend).