Progress update!
More interface changes have been made to allow the friends list to function and invites to work. The aforementioned character encoding issues are also fixed (again). I'm having some trouble figuring out how moving users between friend list groups should work and I don't want to spend a whole lot of time on it so the initial release may just see all your friends in a single "Friends" group. I'm also starting to look more at the interface design - there are a few things I'd like to change to make it more intuitive. I've got a few sketches drawn up so I'll pick one of these and roll with it.
Next step functionality-wise is the "Information Card" (accessed by clicking a friend then the Info button) which will show a bunch of details about the user, where they are, and maybe a picture of them as suggested earlier in the thread. It could also supply a history of names much like the "View Aliases" functionality in the Steam Chat incase one of your friends changes their name. I'll also be integrating support for the blocking/unblocking functionality I added to the chat server earlier.