In a couple days, I'll be hanging out with a friend. Aside from all the stupid stuff we do, he wants to jam. However this'll be the first time for me. So I'd want to set things straight first, because I'm kind of confused atm. I don't have a teacher (can't afford one) so I can't ask him.
*stupid questions alert*

Let's say we want to play in the key of E. I would just slide a scale I want to use so that the root note is on E, right?

I also read SilentDeftone's article on finding what chords are in what key and why, but it sounds time-consuming. I doubt we'd would want to waste time on me finding what chords are in what key. Is there a..faster way or do you just memorize which ones are in what key over time?
For the chords of the major key, I kinda stick to the Tone-Tone-Semitone-Tone-Tone-Tone-Semitone and Major Minor Minor Major Major Minor Min7b5.

So if you were to jam in E; then the chords you would be open to would be

E Major, F#Minor, G#Minor, A Major, B Major, C#Minor, and D#Min7b5. Sorry if this confusing to you; I don't know if you're just learning to play or if its just that you've never jammed with anyone.
I've just never jammed with anyone that's actually wanted to jam/write music. Usually it's just friends showing off. =/

That helps a lot, thanks for clearing the confusion on the chords.
you should learn how to play a 12 bar blues ( just google it) and the the blues scale