Self-confidence is achieved by accomplishing real shit. And it doesn't have to be the same stuff he's trying to gain confidence in. Go do stuff with him that he'd normally never do; bungee jump, sky dive, karaoke, whatever. Something that pushes his boundaries out of his normal comfort zone. It doesn't have to be crazy off the wall shit like sky diving, either. Actually, it's probably best if it's not. Hell, go have fun with it. The more he does that, and succeeds, the more faith he'll have in his abilities when it comes to doing anything. The subject matter doesn't matter at all.... anything will work. He'll just learn that he can accomplish what he sets his mind to, regardless of the task. It's a common process in the military, whereby people are assigned silly, small, simple tasks, and yet successfully accomplishing those tasks go a long way to instilling confidence in them. And he'll have some fun stories to tell, and will probably become a more interesting person as a result.
I've never picked up a girl in my life. I've gone home with quite a few, however the way I see it is that they made their mind up within 1.34 seconds and all I had to do was "not fuck it up". Confidence? Depends on how you define it. If I ever said that I am "manly, awesome and hip as fuck" I would feel quite embarrassed. It sounds so goofy, like one of those vapid "omg omg u r so hot" comments that boring bitches leave on each others' facebook photos. If I said, however, that I feel secure in the knowledge of who I am, do not feel an overwhelming need to compare myself to others and love to have a good time then yah, that is me. The turning point for me was going through a really bad time in my personal life and coming to a realisation that life ain't all bad, and I am capable of handling its shitty hands better than most. After that, the idea that anything a girl says or does in a social situation could affect my confidence is laughable. Personally, I do not see a formula that results in confidence that is any more than illusory. Your buddy is going to have to find the solutions to his problems himself. Trying to show him "tricks" may very well undermine the confidence you're trying to build. He just needs to go about it the right way. *Of course, there were times I felt as though I was losing my mind. I wouldn't recommend the "deal with bad shit" path to confidence to anyone.
Enter a poetry slam as the only white guy in a black club. I can basically say anything to anyone now. It won't necessarily go over well, but the words will at least get out of my mouth.
As someone who has gone bungee jumping multiple times, walked down a 32 degree Fahrenheit waterfall with my life literally in my right hand, and gone white water rafting in bear infested Denali, I can comfortably say this theory is bullshit. I talk to women about as coherently as Jennitalia talks to cats while drunk.
Actually, just simply trying something new and having a good attitude about it is one way to go. Failing at something but recognizing the fact that you tried always makes for a good story. Hell, my most entertaining stories aren't the ones where I talk about what I've accomplished but more so what I've tried that didn't go so well. I'm sure I've told my best-worst-date-ever story a hundred times over by now and every time it works. Why? Because I don't take the whole thing so seriously and it shows that I don't mind taking a risk every now and then. Attitude is the key to confidence; the willingness to try and the ability to laugh at yourself. We've all said it just in some different version. As for the friend, the only advice I can offer is twofold. The first is really just a version of "fuck 'em." Why try so hard to impress someone who may or may not be a positive in your life? You can help him by calling him out on things he does: bad body language, poor attitude. But that's all you can do. He's got to get to a level of self-awareness to recognize when he's giving off a bad signal and have the courage to force himself to change it. I know when I find myself hanging my head, I force myself--literally my inner voice yells at me--to square my shoulders, lift my head, and talk to someone. Most people buy it as I usually get responses like, "I'm not as outgoing as you..." If they only knew the inner conflict going on sometimes. And I don't consider it me being fake as my response to my conflict--making myself talk to someone--is genuine. I remind myself that quite frankly, confidence is one of the sexiest qualities in a person. Why would I suffer in three-inch knee high boots and wreck it by exuding something negative? I might as well adopt the Costanza and go out in sweats because that's about all I'm achieving when I let my fears get the best of me. Or on a more practical note: tell him to wait tables a night or two a week. You'd be surprised what kind of conversation you learn by dealing with the public in that realm. Bartending pulled me right out of my shell when I realized the money I was making depended on how well I was able to talk to people (sadly, a great rack only goes so far). I learned to flirt, listen, and read people in a jiffy. But again, it's putting yourself in a situation where you're forced to talk to strangers. The only difference is that money is an excellent motivator.
Your friend is trapped in his own mind. From my experience, there's no real formed thought along the lines of, "This girl will reject me. My life is going to be over!" It goes more like, "I don't know what to say. I don't want to come off as a creep. Oh man, there's no moment!" It's an unworded anxiety about the fear of the unknown. Unfortunately, the only way to break this mindset completely is go up and talk to receptive women. Sure, you can get him to expand his horizons and round out his character but as you have seen, confidence only crosses so much between different aspects of life. As for how to fix it, he really does need to get out there and start chatting with women. It would be easiest if he found some common interest with them, so if you wanted to help him with baby steps, wing for him by finding a friend or a random that has similar interests that he is really passionate about. His passion will override his fear. Tell him to remember how he felt and use that as his new measuring stick.
I know everyone here seems to be on the DIY bandwagon but if your buddies self esteem/self worth issues are a pervasive problem, he might benefit from seeing a psychologist. Bungee jumping and sky diving might work for some people but for others but their problems might run a bit deeper. If he doesn't think that he has enough self worth for a pretty girl to give him the time of day then jumping out of an airplane or off a bridge might not do the trick.