Not sure where your friend has been serving in The Iraq but keep in mind that he may have trouble being around crowds at first. Make sure you go someplace where he will have the easy option of a quiet, safe place to chill out in once in awhile. My young Army friend came home to America on leave and whenever we left the house, for a car ride or walk, he would get nervous and snappy. He apologized all the time but it didn't change the fact that his reaction to wide open spaces was to be on "guard" all the time.
If you are planning a trip for 4, Ibiza probably will be a bit too far to go. With plane tickets and hotels and the frightful prices of things you might find yourself having to cheap it more than you want but it is a great place, or so I hear. (Haven't been able to go!)
In the states, probably Vegas is your best bet. Lots of clubs, girls (even some you DON'T have to pay), booze, all within walking distance. And some great outdoor stuff is available too if you are into that. There is a race track where you can drive Nascar style, helicopter tours, skydiving, all sorts of active shit. Or you can just drink your ass off in strip clubs and nightclubs. Be sure to bring clothes that aren't just tshirts and jeans or most of those clubs won't let you in.
Las Vegas Hotels - Las Vegas Shows - Las Vegas Entertainment | VEGAS.com
The other nice thing about vegas is its only a couple hours away from LA if you decide to check it out. Nor is it too bad a trip to run down to San Diego for some beach fun.
Cabo is a nice suggestion.
Cabo San Lucas Nightlife - Los Cabos, Mexico
I had thought that the Hedonism resorts were for couples only but I was wrong on that! If you can afford that it may be an experience not ever forgotten!
There are 5 different locations including Jamaica, the Bahamas, and Brazil.