In the above loop you are writing commands over and over again. I would not expect anything to display. I have to assume the supply to this display needs to be 5v (according to the paper you received from your friend). The connections should look like this with 5vName: lcd5v.png Views: 6710 Size: 19.1 KB

Also change the address to $7C again according to the data sheet i found.

Code:
I2C interface
It just only could write Data or Instruction to ST7032 by the IIC Interface.
It could not read Data or Instruction from ST7032 (except Acknowledge signal).
SCL: serial clock input
SDA: serial data input
Slaver address could only set to 0111110, no other slaver address could be set
I found this data sheet at http://www.farnell.com/datasheets/1669635.pdf

The pinouts are the same as your display

Code:
'****************************************************************
'*  Name    : UNTITLED.BAS                                      *
'*  Author  : Dave Cutliff                                      *
'*  Notice  : Copyright (c) 2014 Use at your own risk           *
'*          : All Rights Reserved                               *
'*  Date    : 12/29/2014                                        *
'*  Version : 1.0                                               *
'*  Notes   :                                                   *
'*          :                                                   *
'****************************************************************
 #CONFIG
        __CONFIG _CONFIG1, _FCMEN_OFF & _FOSC_INTOSC & _WDTE_OFF & _MCLRE_OFF & _CP_ON & _IESO_OFF & _BOREN_OFF & _PWRTE_OFF
        __CONFIG _CONFIG2, _PLLEN_OFF & _STVREN_OFF & _LVP_OFF
#ENDCONFIG
OSCCON = %01101010   'sets the internal oscillator to 4Mhz
      
TRISA  = %00000000  
TRISC  = %00000000  
ANSELA = %00000000  
ANSELC = %00000000  

OPTION_REG.7 = 0
SCL   VAR PORTC.0
SDA   var PORTC.1
Reset    var PORTC.2     'could tie reset pin to   vdd through 10K resistor


pause 100
HIGH Reset
'OPF1 = 0 
goto StartProgram
'********************************************************************************
'=============Initializing LCD==========
ST7036Init:


 



I2CWRITE PORTC.1, PORTC.0,$7C,[$00,$38]
PAUSE 10 
I2CWRITE PORTC.1, PORTC.0,$7C,[$00, $39,$14,$79,$50,$6C,$0C,$01,$06] ' 



Return
'********************************************************************************



startProgram:
gosub  ST7036Init
I2CWRITE PORTC.1, PORTC.0,$7C,[$40,$48,$65,$6c,$6c,$6f] ' Hello

IdleLoop:
      ' could blink an led here
goto Idleloop
give the above a try, that a look at the data sheet.

Good luck

Dave