You get your priotities in order. Is this guy or your friend more important?
You think about how your friend would feel if you went out with the guy and you also think the other way around. You think about what would bug you most.
Ultimately, if hiding things is not your thing, then you talk to your friend. You'll end up having a pact and both of you will have that urge to go after the guy and for as long as there is that pact, the urge will be there. That urge will be the downfall of both your personal lives.
To sum up, tell your friend that you like the guy and whatever your friend's comments, go for the guy, but before you do that, make sure the guy is worth it.