I was lad off in May 2009 and this year (2010) I helped a friend with some work. He gave me a 1099. Will I have to pay back any unemployment benefits and not receive any more?

If you collected unemployment, stated that you were unemployed and looking for work, when you actually DID work (either if it's only for a day or two) you have committed fraud. You could be fined, kept from collecting future benefits for an extended period PLUS pay back the benefits.

I would expect to be questioned closely - if you worked off the books (or so you thought) once, it is logical to think that maybe you worked off the books more than once.