Stainless steel is used by most cutlery manufacturers for pocketknives and even hunting knives. Theoretically, there is no reason it wouldn't be strong enough to be made into a sword also.
As for the long sword/short sword question. There actually was no such thing as a "long sword" in medieval times. That was something Gary Gygax made up strictly for the D&D game. However, by the D&D definition, a long sword is usually about 3ft long and a short sword is roughly half that size...so your sword would definitely be considered a short sword.
Either way, it sounds like a pretty cool gift. [img]graemlins/thumbsup.gif[/img] This guy must be a good friend.
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[img]\"http://img.ranchoweb.com/images/cerek/cerektsrsig.jpg\" alt=\" - \" /><br />Cerek the Calmth
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