grep -nr search_string search_dir
will do a RECURSIVE (meaning the directory and all it's sub-directories) search for the search_string. (as correctly answered by usta).
The reason you were not getting any anwers with your friend's suggestion of:
grep -nr string
is because no directory was specified. If you are in the directory that you want to do the search in, you have to do the following:
grep -nr string .
It is important to include the '.' character, as this tells grep to search THIS directory.