[alchemy]

This has come up quite a number of times in co-ops I've been involved in...I've added some links I've read. I'm afraid it doesn't help with your know-it-all friend cause she's right in some respects particularly regarding the chemicals. But there is still lots of good stuff about bamboo fabric compared to the alternatives.

Organic_Clothing: Bamboo: Facts behind the Fiber
Bamboo clothes, eco fashion - The Green Guide - read particularly the last paragraph..
Victoria Everman :: Sustainable, Creative, Enlightened Living :: San Francisco » Blog Archive » How Green Is Bamboo Fabric?
The last link says that Bamboo is only grown in China, and I could be wrong but I'm pretty sure Meg & Tristan (Bamboo Fabric Store) source alot of their bamboo from Tibet...I don't know if that makes a difference to the end result and it's processing, but it was important to them to bi-pass China as a major source for their fabrics.