My neighbors had a 7 foot like new stiffy "longhandle" as they call it, they sell for 115, it says MHP7 line wt:12-20 lure wt: 5/16-1 then 7'

Is this a moderate heavy or medium heavy?

My guess is a medium heavy, but its hard to say. Check how far down the rod bends and that will tell you if its a moderate action.

It has 10 guides and how far down should it bend to be a medium heavy?

Medium Heavy describes the power. This is what people usually describe as the "backbone" or a rod. The heavier the power, the heavier lures you will be able to throw, the heavier line you will be able to use, etc. Moderate would refer to action. A moderate rod will bend much further down the blank than a fast or an extra fast. The link below gives a simple description if mine didn't make sense.

http://www.stcroixrods.com/content/rod_action_and_power

I have jig/worm rods and crankbait rods that are both MH. The crankbait rod has a moderate action though, so it flexes much more than my jig/worm rod which has a fast action, which flexes much closer to the tip.