I see the difference between contacts and 'suggesteds', and I see the need for Google to create this email processing feature, but you're right, the way they go about it is totally obscure, and it does raise some ethic questions. - xavier vespa via FriendFeed MT Plugin

As far as I know GReader friends are pulled from your gchat friends and not your contacts. There might be some overlap if you invited people through gchat into gmail (they can use any email they want, but it gets tied to the gmail account they sign in with). I personally like the fact that all of the people I email get added to the contact list because more than once I needed to email them something again from my iPhone (which, through apple contacts get synced with google) and it saved me quite a bit of time by having it available. I would love a bit more flexibility with my contacts though, for example I have a ton of craigs sale-xxxx email addresses that get used only once and I have to manually go in and edit them out. - Stepan Mazurov via FriendFeed MT Plugin