If you have Live Gold then you can play online with your friends. And um well you can see what they are playing otherwise. I suppose there isn't much use for friends except having for having your friends there.
You are welcome to add me as a friend: Solitude. If your name isn't something like JudeC then just send a message too. I get a lot of friend requests from people who want to buy my name or kids who only play Call of Duty. I have no idea why they are adding me since I only play single player games.
