Basically, what your friend is offering you is $800 less than what you want, and you've already spent $120 advertising it with no return on THAT investment, so you've just cut your profit to $680 minus the monthly insurance cost for it of $75(I think that's what you said) so you've now cut your profit to $605. Every month that you hang onto it, it costs you $195 for advertising and insurance, so in 3 more months, you're going to eat through that $800 "profit" you may have made if you hung on to the car and sold it yourself.
Seeing as how you live in a fairly "depressed" area and you have a sure thing offer of $4200, I'd go for it. Last year we considered selling my Explorer XLT 1998, with a good many nice options, and in good condition, and it was worth about $6000. $4200 sounds like a pretty fair offer for a 1997.
I'd sell it to your buddy and plan my trip!