You(your friend) are not giving enough info about his "pdf graphics files" problem for people to help you(him) out.
However, you also asked a more general question about about backward compatibility of TeXLive 2011. I can answer that question only from a user prospective (there are many TeXLive developers and contributers here who can give you their point of view).
TeXLive is just a distribution of TeX and friends. TeX engines at least the original Don's engine included in TeXLive is frozen (including bugs). pdfTeX engine (not sure but I would guess only bug fixes are added). Some engines are in rapid development like LuaTeX so I could imagine that new bugs are constantly introduced.
On the another hand most of us not just using engines but also various LaTeX packages for example. Those packages in my experience are not backward compatible. I had some very nasty surprises in the past for example with newlfm document class. I needed to quickly sent couple business letters for which I was using some old templates. Unfortunately, the default behavior had changed (it was well documented change as I learned quickly) but it put me in the really difficult situation at that moment.
TeXLive also includes a little helper programs like dvips for example. That particular one is frozen to my knowledge.
I hate to say this (I am sure I will be voted down for this) but TeXLive due to its unreasonable size (kitchen sink approach) and inconsistent behavior when it comes to location of files for example is like a can of worms. I actually liked much better teTeX which is now obsolete.
kerTeX is very promising IMHO. I would really like to see that project picking some more steam in the form of few more developers. I believe that in TeX ecosystem at least for Unix and Unix-like systems there is probably a place for another TeX distribution somewhat in between kerTeX and TeXLive.