I guess it depends on the close-ness of the friendship. Once my friend got dreads in her hair and she honestly asked me what I thought of it, if she made a mistake, and I was pretty diplomatic about it. I think I said something like, "The dreads are unique, but I liked how your hair was before."
If they don't invite an opinion, hmm...I really don't know, unless it's REALLY terrible, I probably would not say anything. I have a friend who wears really horrible make-up (like dark brown lipstick, foundation way too dark for her) and she's always going on about how much she loves make-up. I just smile and nod, she obviously likes what she's doing but it looks so bad. One time my bf (unwittingly) asked her, "Oh did you get a tan? Your face looks so dark!" and I was just laughing inside because it was just her horribly dark foundation, lol!!