i'll add to scott's excellent decription by noting that your contacts list
doesn't show up for other people* when they're looking at your dashboard profile. it's just a list for your own personal use. this was done in part to prevent the "look at everybody in my friend's list" behavior scott described.
does it make it a little harder to find people to add? maybe. but do you really want to have to maintain a whole other "list of friends"?
as we start to figure out more of what we can do with contacts, that makes sense in this service context, we'll add them in. and of course, any ideas you guys have we'd
love to hear.
* i believe this was actually scott's idea. or possibly leslie's. or ted's. hard to keep track.
Google's OAuth support for contacts is "alpha" level right now, so it may be unstable for a while as they finish working out the details.