I saw the number 2004 was written as     and I asked my friend Mandy why they would use Chinese numbers for the two and the four and western (arabic) numbers for the zero. She could not explain and just said "that's just the way we do it".

It turns out I was wrong (sort of) when I asked the question. Here is the explanation:

These are the numbers in traditional Chinese characters still used for writing checks as they are more difficult to change. (The picture is of a plaque in a bank which serves as a reminder for people who may not remember them well. You can see the reflection of the ceiling lights.)

With the implementation of Simplified Chinese characters in the mainland the characters for the numbers were simplified thus:

So, in reality it is just a coincidence that the symbol for zero is similar to the western zero. In fact, I found it odd that the Chinese zero was circular and not elongated vertically like we do it but now I understand it fits better with the other Chinese symbols which generally fit in a square.

What I do not understand is why they would create new simplified characters for the numbers and not just adopt the Western, Arabic, numbers.

Mandarin tools has a slightly different explanation but in practice what I say here is what I have always seen done and I have never seen the traditional zero used in simplified Chinese.

And, while we are on the subject of Chinese numbers, here are the hand symbols for each number: