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Hi all,
  Arnor Value 0. 
  While playing 1940 Fall of France,  my opponent attacked one of my armor units with a machine gun.
The armor unit had an Armor Value of 0. He argued that Armor Value 0 means no armor at all. 
I argued an armor value 0 indicates the vehicle's armor cannot defend adainst an anti-tank attack.
The vehicle's armor can defend against machine gun fire. In the end, I let him conduct his machine gun,
which missed the target.
  What is the correct rule to use in this situation?
  Please forgive me if this question is posted elsewhere.
Dave

An armor value of 0 is armor. Unarmored vehicles do not have an armor rating. Short answer: You are right, your friend is wrong.

Unarmored vehicles have a de-facto value of -1.

Fall of France examples of which you friend's HMG could fire at normally:

Wagons may or may not be in this category. (I've never seen a definatine answer.)

If you had something like:

The HMG can still fire on it, but the only effective result is an X. That result would cause a morale check, not a kill.

See section 1.2 Definitions, page 3 of the 4th edition rules, including definitions of Anti-Tank (AT) Fire, Armor Value, and Armored Fighting Vehicle (AFV). Those, coupled with the Results on the fire tables as Peter mentions above, show that anything with an Armor Value of 0 is an AFV and will only be affected by an "X" result on the Direct Fire table.