How large of a photo could I print with a Nikon D50?

A friend of mine at school wants a picture of her and her roommates done so they can hang it in their apartment. I currently have a Nikon D50, but have never even dabbled in shooting portraits. What settings should I be using to shoot this, and how large could this portrait be printed without losing its quality? They are going for bigger is better.

You could easily enlarge your pictures to 8 x 12 with out seeing any negative results.
Make sure that you use a good lens and make sure you focus accurately.

For a portrait you should be looking to blur the background of the pictures while keeping your friends pin sharp. For that I would recommend an F stop of 2.4 or bigger.

If possible shoot outdoors on an overcast day so that you can get nice defused light from the clouds and do use a fill in flash to get rid of unwanted shadows under neath the nose for example.