Yes, I hereby confirm that this is true.

If my godly proclaimation is not enough to convince your buddies, then I reccomend you have them read the following threads:

This one, dealing extensively with the subject of Squall's parentage:
http://forums.eyesonff.com/showthread.php?t=55818

This one, dealing with how Laguna is aware of this fact:
http://forums.eyesonff.com/showthread.php?t=56412

Even more here:
http://forums.eyesonff.com/showthread.php?t=55529

And of course, the FFVIII FAQ at the top of this page for evidence.

If they still aren't convinced after all that, you have my goddessly permission to smack them upside the head.