If you put someone on your ignore list, then you are unable to see any of their posts, or when they are online. I think that their PMs might get bounced back to them if they try to send you any and they're on your ignore list too, but I'm not sure about that one...
The only thing that I've seen happen when you put someone on your buddy list, is that their name has a little "+" next to it when they are in the list of who is online.