where the packages reside in my system
 

i have installed some updates for my fedora..
how can i copy that to my friends system.

Your initial package install is done from the installation media so the packages reside on that. (They are extracted onto your system during installation so are no longer packaged up the way they were.)

After initial install you can load new or updated packages with yum. These also are extracted and loaded. The packages themselves are only saved if "keepcache" is set to "1" in /etc/yum.conf. The "cachedir" in that file will tell you where the files are saved if it is set to 1. In the cache directory you have .hdr files which are headers and .rpm files which are the actual packages.

If you didn't have keepcache set to 1 then the only way to do it is to download the packages without installing and then transfer to him. If he is on the internet it would be much easier to simply do the yum install there.

*
And when you have edited the keepcache ( ref. post # 2 )
to keepcache=1 , the packages installed, in the future
will be kept in /var/cache/yum/<reponame>/packages/

Usually - However as I noted in my post it is the "cachedir" setting in the yum.conf that determines in which directory the files will be saved.