Well, yes, technnically, what we have here is just a continuity error which, thanks to the timeline having been altered with the intorudction of DoFP, we will never see erased, but with a bit of fanfictioners' trickery, I think it's possible to come up with a fairly plausible answer.
We know that Charles was taking the serum that gave him the ability to walk in 1973. Because he was taking too much of the serum, it stripped him of his psychic abilities. In the DoFP timeline- the altered timeline- Wolverine travels back to the 70's and his involvement effectively ends Charles' addiction to the serum, but in the original timeline, Logan never interacted with Charles in the 70's, so it is concievable that Charles kept on taking the serum well into the 80's. If he lowered his dosage gradually, he would regain hy psychic powers but keep the ability to walk.
As for the fact that he is freind with Erik in the Last Stand flashback; I personally don't think it's very far-fetched that they might have joined forces again temporarily, and then seperated before the events of X-men 1 again, possibly due to their contrary ideals.