My take on GMing is though I want to allow each player to play the character they want to play.. I am responsible for the fun of the whole.
If the player won't amend his ways I would ask him to leave the game. Granted with now only 2 players that might be difficult. I had to do that once in a Fading Suns game I was running. We were in the final arc of the game, so I had some friends show up to play a couple NPCs for the last month or two of the game. I even patched things up with the guy I removed and ran a solo finale for him (in which we had a big miniatures fight and he murdered his way to victory).
That being said, I am also a man who's had a gaming dry spell of almost a year, because I am trying to gather the right group of players. I figure quality over quantity when it comes to gaming. If I bring the kind of people to my table who share my take on gaming, knock their socks off in the first month.. I will have earned gamers for years and we will all enjoy the experience more for it.
So take my counsel with a grain of salt, some compromise may be in order.. but once it stops being fun what's the point in keeping him around.
*edit* the above situation was with friends I had since childhood. Doesn't matter, I take GMing seriously, my friends are giving me one day week (which is a precious thing, in the end all we have is time) to oversee the crafting of a communal story. If push comes to shove, we must do what is in the best interest of the group. A true friend, will either amend his ways and understand, or if not.. there's a deeper problem between you and your friend, my true friends would respect what I'm trying to do.
Edited by zypher