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In an argument with a friend of mine, I was under the impression that the maximum burning speed and the maximum reading speed were equal, and that if you burnt a 16x-capable disc at 8x, it would therefore be read by the DVD player at 8x rather than 16x. How true is this exactly? According to him, the DVD player would read at 16x...

The burn and read speed are irrelevant. All the burn speed does is enable the writing drive to put down the data at a faster speed. It's still the same data whether you burn it at 1x or 32x, it just gets put on there faster. The only limitation as to how fast it can be read is the speed of the drive that is reading it.

Then why is it that if I burn to a 16x DVD at 8x, any drive limits the reading speed to 8x instead of its full amount? I can also cite other examples where the burning speed limited the reading speed.

It depends on the quality of the media. However, I burn things to my low-qualtiy Sony DVD media at low speeds to prevent coasters, and the discs still read at full speed.