When you take the oath to the Queen at the citizenship ceremony, you are a Canadian citizen. The U.S. may continue to regard you as a U.S. citizen, but they cannot collect taxes on income gained in Canada or under Canadian law after you have become a citizen. When you cross the border with your Canadian passport, there wil be no trouble UNLESS you owe taxes incurred before you became a Canadian citizen or have committed a criminal act on U.S. soil.
Children of Americans who have taken Canadian citizenship, if they were born in the U.S., may file for U.S. citizenship upon reaching maturity. Canadians tend to call this "dual citizenship," but the U.S. does not recognize that it exists.

Did your friends just "come" and live in Canada from the 1970s until 2005 or thereabouts- 25 years or so without doing anything about their citizenship? Twenty-five years without declaring income in their country of legal residence, which the U.S. rightly regards as U.S.?