Xinghonh,
It was the matter of time before your friend's engine dying. Changing to aftermarket filter will only gives more air suction, and most of them perform much better than the stock air filter. Did your friend disassemble the stock air box and run the car without any filter first before getting it replaced with the HKS filter ? Or he/the mechanic wrongly installed the filter, there are many factors leading to engine failure.
1. Anyway, to TS, it depends on your taste, you want power or handling first ? If light mod you can opt for aftermarket air filter first - Open pod and heatshield, or drop in. For open pod you can try Apexi Dual Funnel, drop in will be K&N Drop In filter.
2. Rough ? This is too vague. What happen actually ? Or issit your lifter making noise during the morning start ?