i personally think its either a special or rare depends on which stegedon but my friend {since he checked gamesworkshop} thinks it a lord.
The regular stegadon counts as a special choice, the ancient version counts as a rare. When either is taken as a mount for a character they don't use up any additional slots(other than the slot taken up by the character itself).
Nope. As SiegeCommander said, it doesn't take an extra hero slot. None of the LM mounts take extra slots. A skink priest is obviously a hero slot, but adding the steg doesn't increase that. I have no idea where your friend got the idea that the steg is a lord choice, but as soon as you look in the book you can very clearly show otherwise. Unless he was referring to Mazzdamundi, who is a Slann on a stegadon, which all up is a lord choice.
didn't meant it as it takes up a hero slot but thay you can take it as a mount for your hero so the steg is a hero slot and not a extra hero slot sry if i wasn't clearly enough
As Strewart said the only Stegadon Lord I know of is Mazdamundi on a Stegadon which is all up as a Lord choice or the other special character Tehenhauin Prophet of Sotek, whom in this edition may be upgraded to ride on an engine of the Gods Ancient Steg much the same as an Empire General can take a Griffon as a Mount. Both cases though I would say the wording in the Lizardmen book state are a Lord choice whom is taking a Stegadon/Ancient Stegadon as a mount. Otherwise a Stegadon takes only one Special slot, and an Ancient Stegadon takes a single Rare slot.
Stegadons, when taken as mounts, do NOT count as hero or lord choices at all. If they are not taken as a mount they count as the respective unit type (special/rare).