I’m in love with Brazilian people, with Brazil, and I’ve been to Brazil three times (twice in Rio). I haven’t been to any other South American countries, so I can’t give you a comparison there.
My opinion of Brazil in general is that it’s a country that’s only a few steps behind the U.S. in how modern it is, and in some areas this makes a big difference.
Modern places like shopping malls do have handicapped parking spaces, elevators, curb cuts, and so forth. Sadly, compliance and respect for these parking spaces isn’t quite what it is in the U.S.
In the smaller towns out of the city, or in the more rural states, I really didn’t see any concessions anywhere for the handicapped. I did occasionally see people in wheelchairs in the middle of other groups, so it would at least seem that the people accept the handicapped, just that the facilities for them aren’t present.
In Brazil in general, the infrastructure just isn’t as good, or as well-maintained as in the U.S. Expect to find poorly-maintained sidewalks, roads with potholes, malfunctioning street lamps, and so forth.
However, like anyplace in the world, I would imagine they’d make some big improvements in and around the area where the Olympic games will be held.
As far as flat and hilly ares, Rio de Janeiro has both. The hills contain some scenic things such as Cristo Redentor (the large Christ the Redeemer statue). The hills also have the favelas, which is where the then-recently-freed slaves made their shantytowns.
You mentioned taxis. Taxis in Brazil are probably not as expensive as you might think. Also, keep in mind that tipping taxi drivers is not customary in Brazil. (Although, if the driver helped you in some special way, you might still want to tip for that.)
If you can work it into your budget, you might consider just hiring a private car and driver to serve you during your stay. When someone I know was in Rio for about four days, I think the cost was $R500, which is just under $300 U.S.
You might pay even more for a driver who speaks English, and/or during the Olympics. But, the driver would not only serve as your source of transportation, he could also help you choose where to eat, what tourist sites to visit, and so forth. Brazilian cars are often smaller than ours. You did mention that your friend doesn’t use a wheelchair, but I thought I would mention that even a folding wheelchair might not fit in the trunk of all Brazilian sedans. If a wheelchair will be involved, be sure to advise the driver, so you can find an appropriate car.
Other things that may be of use to you:
www.gringoes.com Site for Americans who like and/or live in Brazil. They have a message board there as well; maybe you could find some more information.
http://www.rioholiday.com/Rio-de-Janeiro-Private-Transportation-and-Tour-Guide.htm Here you’ll find a short passage about hiring a private driver.
www.xe.com You can check the current exchange rate to see how many Reais you can get for a dollar.
P.S. Although I don’t know much of anything about the Olympics, studying and learning about Brazil has become a big hobby of mine. If I can help you in any way, feel free to PM me.