See where it says "my friend" and has the red arrow by it? Click that arrow. You'll get a menu chocked full of options that have to do with your friends list as a whole. But to get to where you change each friend directly, you'll have to click Edit Friends. (Note, the one above that, clear notifications, is great for those times you've been out of town for a week and come back to several hundred journal entries, bulletins, and photos that you'll have no time to look at. Hit that, and the icons by everyone's name go away.) You'll be given a list of your friends, in alphabetical order, by their rank. click on the one you want to say goodbye to. You'll get something that looks like this:
1. Allows you to reclassify your friend.
2. Decides if they can know when you're online.
3. Do you want a noise played when they come online?
4. If you want to get an email or DN message every time they post a journal, here is where you select it.
5. If you don't want that, but still want to know, this will allow you to see when they post a new picture, bulletin, or journal. (Note, the icons for those have changed, but it still does the same thing).
Remove is the button you want. It will ask you if you're sure you want to do this. Are you sure? Are you sure you're sure? Alright then, click it.
Note: Removing does not ignore or block users. It just takes them from your friend list.