Trouble with "traditional" medical gifts is that either:
a) the recipient already has one (the old stethoscope)
b) it is not appropriate for the recipient (ie, getting a stethoscope without being specifically asked for the exact model, or a diagnostic kit for the radiologist)
c) it is given free to the recipient: some programs give their residents Palm Pilots/PDAs, tools, books, etc.
Without knowing what field your friend is going into (can you ask his parents, or have some other way of finding out?) it makes it hard to recommend books. I'm sure he already has a fine medical dictionary and a clinical exam book and most specialty books will either be purchased for him by his residency program, or he will be provided with a book fund for such a purchase. Don't get him a lab coat embroidered with his name (I got several) as the program will give them to him with the hospital logo on it.
However, if you can find out what program he is going into, and what THE book to have for that specialty is, a nice thing to do would be to have it autographed by the principal author. Especially if that person is someone famous in the field.
Consider giving a non-medical gift. Not cash, but if your friend is moving how about something for his new home, or a San Francisco gift pack -ie, maps of the city, mass transit schedules, chocolates from Scharffen-Barger (something to that effect) or Joseph Schmidt, a restaurant gift certificate, a travel book about the city (if he's not very familiar with it)?
He will eventually get business cards, so perhaps an engraved business card holder (or maybe that's better for finishing residency).
depending on your budget, perhaps an open jaw ticket home from San Francisco for which your friend can pick the dates once he has his vacation schedule.
If your friend is the Norman Rockwell type, there are loads of prints on EBay and other places featuring doctors. Or if he is a fan of ancient Asian culture, there are some ceramic female examination figurines (used when female patients saw a male doctor, they would point to the area they were having a problem with, rather than being directly examined. Sort of quaint, IMHO).
Maybe a nice on-call bag - you could pick out a nice leather bag (manly type one - but not a medical bag - no one uses those) and fill it with things loved by residents on call: snacks, Brush-ups (or a real toothbrush and past), aspirin, eye drops, ear plugs (have him set his pager to vibrate), clean socks, small blanket, picture of his S.O., a handbook for his specialty for some light reading, gum or breath fresheners, telephone card so he can call loved ones long distance (just in case his hospital requires that he dial in a access code to dial long distance), some notepaper, or small notebook, etc.
Hope this gets you started...