|MadSci Network: Astronomy|
Your friends might be right, they could be satellites, especially if you saw them at dawn or twilight, when the Sun has set but still illuminates the regions of space high above you. Actually, the U.S. Space Command tracks over 4000 objects in earth orbit, ranging in size from a pencil to a bus. For instance, the Hubble Space Telescope and the Russian Mir space station are that large, and can be seen with the naked eye.
More information on this subject can be found at:
Hope this helps, and have a great day!
Try the links in the MadSci Library for more information on Astronomy.