Can't comment on whether it works or not, but it sounds like there's a mix-up here. On iOS, it would be their bubble that is either blue or green when messaging you, not yours. To an iOS user, everyone else is a grey bubble.
Also, even then, sometimes existing conversations won't automatically switch from SMS to iMessage. I'm not sure what the trigger is - he might just need to wait a while, or delete the thread and start it again.
