I have a friend who is using "acknowledge" when someone asks him to confirm something. Usually I observe people using "Okay, noted." but I never see anyone using "Acknowledge". Therefore I want to check that it is okay to use "Acknowledge" instead of "Okay, noted." in response to an email?
You could certainly use acknowledged. You need the past tense form.
"Acknowledge" in the present tense will look like a command to the person who receives the email, not as a response.
In general, I find if you only say this, it will sound a bit terse and could be taken as rude.
Generally, I prefer less formal responses like your example or "OK, got it", "Thanks, I'll make a note of that".
There are two words in the lingo of aviation radio communication, "roger" and "wilco." The first (named after the name of the letter "R" in the old radio alphabet) stands for "I received your transmission." "Willco" is short for "I have received your transmission and will comply with your order." When your friend replies to a message by saying "acknowledged," it sounds like he means "roger." If that message is a request or a command, the sender is not only interested in hearing that the message has been received, but he also wants to know whether the request will be honored or the command obeyed. "Roger" and "acknowledged" don't give that assurance. To avoid confusion in that instance, your friend should find some locution that means wilco.
accept or admit the existence or truth of.
recognize the importance or quality of.
notice or pay particular attention to (something).
record (something) in writing.
Source: Oxford Dictionaries
I use acknowledge a lot too :P.
When you acknowledge something, you understand the importance and the truth of the fact being told to you. It goes far beyond just understanding or noting the point. The word note doesn't have such a powerful connotation or impact attached to it. It more or less means mechanically(or mentally) jotting down what is told to you regardless of what its importance is.
Moreover, the word acknowledgement is more formal. "Okay, noted" is something you would use in colloquial English.
If the mail you're writing is a formal one, related to business or school or anything like that, you can say "I acknowledge the fact that..."
If you're writing to a friend or a relative, you can say "I've noted your point."
For ex: I completely acknowledge that this project is my own creation.
I acknowledge(you can use admit also) that ____ is my own son and that I shall be funding his undergraduate education. (Here, acknowledgement means that you are responsible for the fact you've stated.)
I understood the point that you were trying to get across. I've noted it.
From the M-W, acknowledge means
to say that you accept or do not deny the truth or existence of (something)
to tell or show someone that something (such as a letter or message) has been received
E.g. He quickly acknowledges all of my e-mails when he receives them.
So, it's correct to say acknowledged when someone asking to confirm something, however it looks unusual.
Acknowledgement is recognition of the fact(s) or points as stated. Unless a very legal issue, it should suffice as to be acted upon. Per the military reference, Wilco, is quite specific that the recipient of the communication 'will-comply' with the directive. In business an 'acknowledgment' should be a 'will-comply' and should simply be confirmed as such between the parties; however, if necessary for legal reasons then 'acknowledgement' only could be simply 'yes, I agree' but not necessarily that they shall act accordingly.