Friends display as such in your profile (or would if it was working correctly) and contacts are used within the PM system for limiting communications. Friends are automatically contacts, but you can also request just a contact via the friends request options. Here:
http://www.askmehelpdesk.com/profile.php?do=buddylist Quote:
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You may limit the receipt of private messages to just moderators and your contacts. Other members who attempt to send messages to you will be told that you have disabled private messaging.
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Friendships are a two way affair whereby you send a request that needs to be acknowledged, but contacts are one way.
you basically allow that member to use PM's with you.