The FriendlySource attribute accepts a string, which must match the Id of a field included in the current View.  This attribute exists to make it easy for to store a URL friendly string with each record created.  It automatically fills in the current field when the FriendlySource field is edited for the first time - forcing lower case and eliminating spaces and other 'non-URL' friendly characters

In the following example, if a user types "Meeting Minutes for January Staff Meeting" in the Title field, the Friendly field autofills -  "meeting-minutes-for-january-staff-meeting"
<View Id="BlogPosts" TableId="Content">
    <Column Id="Title" Type="VarChar" Length="255" Important="true"/>
        <FieldSet Id="ArticleFields" Name="Article" Important="true">
            <Column Id="Friendly" Type="VarChar" Length="255" ValidPattern="^([a-z0-9]+(-[a-z0-9]+)*)?$" FriendlySource="Title"/>

The View Base XML for both Content and Contacts records defines a Column named 'Friendly' with FriendlySource="Title" and it is rarely useful to override this convention.  However, if, for example, it's preferred that the Friendly field populate based on the Contact Last Name - then it's simple a matter of setting FriendlySource="LastName".

Note that this attribute only causes a field to autopopulate when the field using friendly source has not yet been populated.  Once a record is saved the value in a field will not update to reflect edits made to the FriendlySource fields.