The Friends list is a great way to keep track of players you group with often. It also allows you to block players who you do not want to group with, or see in chat.
The main friend list shows you your friend's name, level, class, and login time. You can filter your friend list to show only online friends, or have it show all friends regardless of status. To add a friend, select the Add Friend button in the top, right-hand corner, then type in the player's name. One they approve the request, they will show up on your friend list. If a player has invited you to be their friend, you will find the request on the second tab of your friend list.
If you want to block a user, which will prevent you from seeing their chat, go to the third tab of your friend list. The add button is in the top, right-hand corner. Simply click it, and type in the name of the player you want to block.