Enable/Disable Friendly Fire (credit: Professor Mamet)
You'll find a room at the top of Area 00 with two pull-down levers inside. The easiest way to trigger them both is with two players, of course. However, even in single player mode, you can plug in a second controller to spawn another player while in this room, thus allowing you to pull both levers.

Activating the levers enables/disables friendly fire in Co-op mode.