Just to clarify: variables are only interpolated within a string literal if it is double-quoted, not if it is single-quoted. Also, since using single quotes for HTML attribute values is perfectly OK, you could simply do the following rather than escaping double-quotes within the double-quoted string literal:
$bulletinMessage = getParam('bulletinMessage',"Hi! I found an awsome site <a
href='http://www.site.com/index.php?action=newmember&friendid=$friendid'>www.site.com</a>!
Go take a look!");