As Kevin said, "literal" is in the eye of the beholder.
The KJV, NKJV, ESV, HCSB, and NAS all claim to be essentially, mainly, basically, or completely literal translations.
The rub comes in how you conceive of the idea. In another thread, we have heard from a PB newbie that he loves the ESV because of the way in which it attends particularly to verbal tenses, translating a perfect in Greek as a perfect in English, etc. The NAS excels in replicating some of the forms of the original in ways that delights the Greek student who "forgot" to do his homework and which correspondingly frustrates the person trying to read it from the pulpit.
So which one is more literal? Does the attention to some of the devices and artifacts of the Greeek (NAS) make it more literal than one that gives special attention to consistency in handling the crucial Greek tenses?
The other issue that your friend may be referencing has to do with the textual tradition behind the translation. The KJV follows the Byzantine manuscript tradition (which has now grown to about 95% of the extant manuscripts we know about today). The NAS (like the ESV, HCSB, NIV, NLT, and just about every 20th century English translation) is based on an eclectic text composed of primarily Alexandrian manuscripts (originally coming from the Egyptian deserts and "found" in the mid 1800s) with occasional changes to prefer a Byzantine reading.
IFF you believe that the Alexandrian readings are the "oldest and most reliable" manuscripts, you will probably want a Bible translated from them. This ranges from the literal NAS and ESV to the dynamic equivalent NIV to the paraphrastic TEV or even the Living Bible.
IFF you accept the arguments (trotted out endlessly in PB, just check the search function), that the Byzantine tradition is more likely to be more authentic (either because it is in the majority or because of some particular view of divine preservation, you will prefer the KJV or KJV.
The NKJV is not simply a KJV without the thees and thous. In places they have "fixed" some of the evident errors in the KJV translation. At other points, they felt free to correct the 6 Byzantine manuscripts available to Erasmus in 1516 in light of some of the thousands of additonal Byzantine manuscripts that have been uncovered/discovered since the 16th century. Oh, and in the NKJV, it gives you the reading (usually based on the same texts as the KJV, Luther Bible, Geneva Bible, etc.) AND tells you in a marginal note what the modern Alexandrian/ecclectic text says at that point (marked by a "NU" for Nestle/Aland - United Bible Societies, the two critical Greek texts used today, or by a "M" to indicate where the broader Byzantine tradition of manuscripts differs from the text behind the King James).
So, if you want a "LITERAL" style of translation, you have the choice of the following: KJV, NKJV, ESV, HCSB, and NAS.
If you want a "LITERAL" style of translation based on the types of manuscripts behind the Geneva Bible, Luther Bible, and KJV, you have the choice of the KJV or the NKJV.
If you want a "LITERAL" style of translation based on the types of manuscripts more like the ones discovered in Egypt and dated to the 300s, then you should use the NAS, ESV, or HCSB.
Among the LITERAL translations, some are more "wooden" English in an effort to mimic the Greek (e.g., NAS). Others are more colloquial in their English devices, but still literal (e.g., HCSB). For example, an NAS style would be: "He was teaching them, and he was saying to them, 'Let us go to the mountain.'" The HCSB might translate that: "He taught them and said to them, "Let's go to the mountain." Both renderings faithfully represent the Greek (which has a decided preference for participles, the "-ing" words in English). Since people typically uses contractions in dialogue, the employment of the contraction "Let's" for "Let us" is LITERAL and actually does a better job of fitting the probably original setting.