I didn't know there was a difference between friends and contacts. This was a thread back in 2009. Anyway, when you click on someone's name in the threads, you can add them as a contact. When you go to that individual's page, you can add them as a friend. I thought they were the same, so I asked Moo and here's his response:
They are not the same thing.
A "contact" is just someone you follow / subscribe to. You're more likely to see their public stuff.
You can add anyone to your contact list without asking them, without them even knowing you did it. It is like a rolodex of people you find interesting.
A "friend" is someone who you sent a friend request to, and they accepted.
Unlike being on your contact list, this can actually give you permission to see "friends-only" stuff of theirs.
So, there's a fairly big difference. That said, yes, the difference is not explained in the interface.
I'm sure most of the older members know this but for a yearling like me and others, I thought it would be helpful to pass along.