It's a live audience and a laugh track.

Yes, The majority of Friends was filmed in front of a live audience, with the exception of a few shots filmed on location here and there. I saw a recent interview with Lisa Kudrow where she talks about being frustrated on stage because of all the pauses for audience laughter, where the actors would have to pause and do some idle animation. That a television show taped before a live audience is expected to be different than a stage play.

I've also seen a "behind the scenes" video, I think as a special feature of the DVD releases, where they would swap out audience reactions. Because, for example, the take where Monica pops out from under the sheets with Chandler, revealing the two were sleeping together, the live audience went nuts for several solid minutes. For the broadcast version, they inserted an uproarious but brief cheer to keep the pacing up.

Compared to MASH or the Flintstones (!!?!), Friends' laugh track is a lot more genuine but it was at least somewhat engineered.

It's still a laugh track. The laughing is captured live, but presumably with a different microphone. They then mix the laugh track with the character's voices to get the levels they want.

I hate laugh tracks - but most of the show (as far as I can tell) is in front of a studio audience