Encourage him, make him BELIEVE his dad is going to be OKAY. Why don't you hangout with him, ya'know, to ease his mind, and spirit, and to help him not think about his dad so much?
Noooooooo. No no no no no. x-x You don't want to make someone believe their dad is okay when he really isn't. What happens when it all goes bad? There is no cure for cancer, the kid isn't 5, and even if he were 5, you still wouldn't want to say "oh, it's okay" just to avoid telling the child what just happened to his dad who is now underround. x-x
Okay.
One, don't tell him you know what he's going through. I doubt you do unless one of your parents has/had/died of kidney cancer. By saying that, all you'll do is make him angry at you, you'll be trying too hard and he'll know it.
Two, make sure you're there for him. Sometimes, all a person needs at this kind of time is an ear that'll listen. Just being there would help, you most likely don't need to come prepared to reply or preach or to play games or anything. Sometimes, all a person needs is someone else there with them, someone they trust and know. To be honest, whenever I'm feeling miserable about something I can't do anything about, I just really want to sit at a friend's house or at my house with them on the phone or on AIM, knowing that there, I've got people who love me on the other side of the line, watching a conversation, sitting on the couch by me. Some people just don't need a person talking to them, they just need company.
Which brings me to three. This where you come in, best friend right? He's going to turn to you. Go with him to visit his dad. You probably know him. See about setting up times when he and his dad can go out fishing or something. Cancer eh...takes a while. I don't think he'll be in the hospital all the time. Tell your friend to spend time with his dad. This is where you get to be selfless and tell him "hey, go see a movie with your dad tonight, we can go some other night." This is also where you're selfless and help your friend even though your favorite show comes on.
Dealing with this stuff, it's hard. I know people who have luekemia, I've dealt with deaths at my school, and my mom had an operation earlier this summer.
Beyond helping him, I'm liking the idea of fundraisers. See if it is possible to for him to get a kidney transplant. Usually, not, but hey, it can't hurt to ask. Is there? Raise money. Car washes, babysitting, pet sitting, bake sales, money is money. No kidney transplant? Can still help; fathers are usually the ones that bring in the income. Unless his mother does the working, I'm sure they may be low on money for a while, or longer, or at least till his mom finds a job. See about making dinners for the family, just so the mom can take a break. Do some jobs around the house for free, like mowing the lawn, but don't become the dad.
To be honest, cancer is a tricky situation. :/ A lot can happen or not happen with it.