Agreed with Arct1k, sounds like your neighbor got took. On weekdays at the plant I worked at, the voltages would fluctuate from 108-120 throughout the day with no effects. Most 110-120 volt appliances and what not are designed to take input voltages of 105-130 and will use whatever they are given being more efficient at the higher than lower voltages.
Could be a power conditioner or something to do with power factor correction.
What do they call this thing your friend got?
Power Factor correction is mainly used in 3 phase motor applications. Especially larger ones. It lines up the magnetic harmonics inside the motor by altering the sine wave on the phases to match the winding better.
Power Factor correction also works with single phase motors although the benefits aren't as pronounced.