The doctrine of the Word of Wisdom is pretty straight forward, but when it comes to contemporary considerations that were non-existent when the text was written there is a little bit of a gray area. Coffee and tea are what are meant by "hot drinks," and as to the reason behind it, no official declaration has come forth. Many speculate on the presence of caffeine, but chocolate also contains caffeine and no prohibition stands for that. When we speculate about the reasons behind the revelations we leave ourselves open to being quite wrong, so I personally try to avoid it whenever possible.  
 
Joseph Smith once said in response to a question regarding how he managed his community so well, "I teach them correct principles and they govern themselves." When it comes to the intricacies of doctrines like the Word of Wisdom we are generally asked to decide what we think is best for our relationship with God (to govern ourselves). Some people are very sensitive to caffeine and have decided the Word of Wisdom excludes, for them, caffeinated drinks. To compare it to something from the rabbinical Judaism, they have put a personal fence around the law so that they don't get close enough to breaking it that there's any kind of temptation. There's a saying that no one ever fell of a cliff who didn't walk near one. Other people aren't so concerned about caffeine, and there's no official statement from the church telling them they're wrong. Several leaders have expressed their feelings on it (Bruce R. McConkie, Heber J. Grant), but no official declarations have been made.  
 
At BYU they do not serve caffeinated drinks on campus. Some people think that indirectly supports a caffeine-free Word of Wisdom, but most think it's just to adapt the campus to the "weakest of the Saints" so to speak. If your friend drinks Coke he's probably decided that caffeine is not really a concern for him, and the Church will not dole out any kind of consequence for that decision. Near-beer tends to toe the line a little more because it's often hard to distinguish from a distance, and most would probably wonder why a Mormon would want to drink it anyway. I have never heard of any explicit prohibition on it, but it does contain a small amount of alcohol, so to be technical, it would be a violation of the Word of Wisdom.  
 
I hope that helps!