Sounds like your friend has the right idea, but not necessarily the right execution plan...
A week doesn't sound like enough time to me... but then again dimensional lumber here in the U.S. tends to be very wet. Ideally, you'd use a moisture meter and let the wood sit until the moisture content had stabilized. Unfortunately, moisture meters are expensive. Weight is another good indicator. As long as the weight of the wood is changing significantly, you don't want to use it.
The wood doesn't need to be in the house, but all of the wood (real wood; not MDF, plywood, etc) you'll use for the cabinet needs to be in the same place for a couple of weeks. And it needs to be stacked in such a way that air can circulate around all six sides of each piece in order for it to dry properly. There may be some additional expansion/contract if you move the wood from, say, the garage to the house but it will be minimal in comparison to the changes from the initial drying.
I think that Hard Wax Oil is probably a waste of money. Either your wood will be stable and your design will account for the small amount of expansion and contraction that normally happens, or it won't. If the wood is good and the design is good, you don't need Hard Wax Oil. If the wood or the design are bad, Hard Wax Oil isn't going to save your butt for very long... and it sounds like a lot of work!