Your friend list displays all your friends. You may add up to 50 friends per character, and see who is online. You can Private message or visit friend's miniland if they are online and their minilands are unlocked, as a bonus to having friends. A "Wing of Friendship" is also purchasable from Nosmall to instantly teleport a player to someone on his/her friendlist.
To add a friend, simply click on the name of the character and click 'friend' button. If you've had enough of a friend, you may also delete them, by selecting them on the friend list and clicking 'delete'.
You may deny friend requests through the system options, simply check 'deny friend request'.