A friendship is a mutual, two-way relationship between two users. It is initiated by one user and accepted by the other.
A contact is a one-way friendship. This could be where the other person does not accept the friendship, a friendship request is pending, or you do not wish to be friends at this time but want to show them as a contact only.
Contacts are people on your friends list
Friends are people who are both on your friends list, and their own.
So if I have Lynne on my friends list, but she doesn't have me on hers, she is my contact.
If I have Paul M on my friends list, and he also has me on his, we're friends.
What all this does is work with Profile Privacy, which allows users to set things to either:
Everyone, Registered Users, Contacts, Friends.
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