Hi,
Obviously they would like to recover this data, what is the best plan of action?
Thanks
In order of ease of use
Look in the trash.
Use their data backups (irony).
Taking it into an apple store or Mac experienced technician who can take the disk out or connect to it in target mode and run data recovery.
Try and repair the disk using Disk Utility*
Failing that, a recovery utility like Data Rescue with an external disk to copy it to, once you start recovering stuff in situ chances are you'll overwrite stuff and make the situation worse
As above but recover in situ*
Both options with * not optimal because you may make the situation go from bad to unrecoverable. You working remotely telling a novice (assuming so as I guess they didn't bother to backup or you wouldn't be asking?) what to do, probably a very high chance of disaster. If they really want it back, I'd go for an apple store or experienced apple tech. Even if they charge $200-$300 for 10 minutes work, you, over phone with no additional disk to write to, and novice typing your commands in, have a chance of making it irrecoverable.
Update; I see previous poster put it more succinctly than me re apple store etc
Second Update following this
update, the space is being taken up on the HD but files are not showing?
For example the pictures show up in iphoto but the files aren't there outside of iphoto?
That makes no sense at all, why are you even looking for the files if they are visible in iPhoto??
Such a comment makes even stronger the previous advice,
visit a Mac repair specialist, you are going to make things worse.