my friend's outback will overheat when going up a long hill but will not overheat when sitting at an idle. the only thing that happens is the check engine light comes on. i am thinking it may be the thermostat, but before i drain the fluid i thought i would ask if anyone else has had this problem before.

 

I would lean towards a head gasket failure. When I had a head gasket failure on a previous vehicle (not on a Subaru), at first it would be fine at idle or driving, but up long hills it would overheat. Also, the motor in that Outback is known for head gasket failures.

Not the best news, I know, but that would be my guess at the problem.

 

What is the CEL for? Does the temp spike, then drop?

I've had HG's go twice on my 97 in 240k miles, your symptoms sound about right.