| This is almost certainly not the best way to do it, but it works, especially if you're looking to avoid using Cubase. I typically convert the MP3 file into a WAV file for any song I want to jam with, and copy it to the "stereo" or one of the "project" folders on the SD card that I'll use in the H4.
Once the SD card is back in the H4, put the H4 in 4-track mode, start a new project and then use the "import" feature to copy the guitar WAV file into your current project. Then select, say "Track 1" and toggle the name of the file until it matches your buddy's guitar file. So this is the track you'll set for playback (make sure the track 1 light is green) while you record.
Press the buttons on the face of the machine to select "track 2" and make sure you set it up for your input/effects/monitor on/etc. Then you simply start recording. Track one should be in playback mode (green light) and track 2 in record mode (red light). I use headphones when I record so I'll hear the track one playing while I add my bass track to it.
Once you're all done, you've got 2 options: a) Upload both tracks to Cubase and mix them there or b) use the "bounce" feature of the H4 to output a single WAV file that has both tracks mixed together. | 
