Privacy Feature, Here's the code.

The privacy feature I've developed for this module is not a patch to buddylist.module.

REQUIREMENTS:
Drupal 4.7 (w/ PHPTemplate)
Buddylist.module with accept/reject feature

Here's what I've done:

1. Create a privacy table

-- 
-- Table structure for table `privacymode`
-- 

CREATE TABLE `privacymode` (
  `uid` int(11) NOT NULL default '0',
  `privacyid` int(11) NOT NULL default '0',
  PRIMARY KEY  (`uid`,`privacyid`)
) ENGINE=MyISAM DEFAULT CHARSET=latin1;

2. Create a new page in your Drupal site

<?php
global $user;

echo '<form enctype="multipart/form-data" action="process.php" method="post">

Who can see your profile:<br><br>
<INPUT TYPE=RADIO NAME="Selectprivacymode" VALUE="1">Your friends only<br>
<INPUT TYPE=RADIO NAME="Selectprivacymode" VALUE="2">All registered users<br><br>
<input type="hidden" name="Useridnumber" value="';?><?php print $user->uid ?>
<?php
global $user;
echo '">
<input class="inputsubmit" type=submit value="Save">  <input class="inputsubmit" type=reset value="Cancel"></form>'; ?>

3. Create a global.inc.php file

<?php

function pt_register()
{
  $num_args = func_num_args();
   $vars = array();

   if ($num_args >= 2) {
       $method = strtoupper(func_get_arg(0));

       if (($method != 'SESSION') && ($method != 'GET') && ($method != 'POST') && ($method != 'SERVER') && ($method != 'COOKIE') && ($method != 'ENV')) {
           die('The first argument of pt_register must be one of the following: GET, POST, SESSION, SERVER, COOKIE, or ENV');
     }

       $varname = "HTTP_{$method}_VARS";
      global ${$varname};

       for ($i = 1; $i < $num_args; $i++) {
           $parameter = func_get_arg($i);

           if (isset(${$varname}[$parameter])) {
               global $$parameter;
               $$parameter = ${$varname}[$parameter];
          }

       }

   } else {
       die('You must specify at least two arguments');
   }

}

?>

4. Create a process.php file (which the form action will post to)

<?php
include("global.inc.php");
$errors=0;
$error="The following errors occured while processing your form input.<ul>";
pt_register('POST','Selectprivacymode');
pt_register('POST','Useridnumber');

if($errors==1) echo $error;
else{
$where_form_is="http".($HTTP_SERVER_VARS["HTTPS"]=="on"?"s":"")."://".$SERVER_NAME.strrev(strstr(strrev($PHP_SELF),"/"));
$message="Selectprivacymode: ".$Selectprivacymode."
Useridnumber: ".$Useridnumber."
";

if ($_SERVER['HTTP_REFERER'] !=("http://yoursite.com/?q="); //Change URL to where the form is located. It's
                                                                                                                                                                                                                                                                                                  //It's a weak but effective security feature                   
	
 
  header("Location: http://yoursite.com/error");  //Create an error page
  
} else {

$link = mysql_connect("HOST","USERNAME","PASSWORD");
mysql_select_db("DATABASE",$link);
$query =mysql_query("SELECT uid FROM privacymode WHERE uid = '$Useridnumber'");
$result = mysql_num_rows($query); 
  if ($result > "0") {
$query = "UPDATE privacymode SET privacyid = '$Selectprivacymode' WHERE uid = '$Useridnumber'";
mysql_query($query);



  } else {
$query="INSERT into privacymode (privacyid,uid) values (".$Selectprivacymode.",".$Useridnumber.")";
mysql_query($query);
	
}
}
}
?>

5. Create a private profile, save it as private_profile.tpl.php, place it in your default template folder.

6. Create a public profile, save it as user_profile.tpl.php, place it in your default template folder.

7. Insert snippet into template.php

<?php
function phptemplate_user_profile($user, $fields = array()) {
$link = mysql_connect("HOST","USER","PASSWORD");
mysql_select_db("DATABASE",$link);
$sql = "SELECT privacyid FROM privacymode WHERE uid = '{$user->uid}'"; 
$result = mysql_query($sql) or die ("Unable to run $sql: " . mysql_error());
$row = mysql_fetch_array($result, MYSQL_ASSOC);

	 if  ($user->uid == ($GLOBALS['user']->uid)){ //viewing own profile
	return _phptemplate_callback('user_profile', array('user' => $user, 'fields' => $fields));

} else if ($row['privacyid'] == 2){  //public profile
		return _phptemplate_callback('user_profile', array('user' => $user, 'fields' => $fields));
	
} else if ($row['privacyid'] == 1){  //private profile

			if (@in_array($user->uid, array_keys(buddylist_get_buddies($account->uid))) && user_access('maintain buddy list')) { //user is friend
			return _phptemplate_callback('user_profile', array('user' => $user, 'fields' => $fields));

			} else {  //user is not friend
			return _phptemplate_callback('private_profile', array('user' => $user, 'fields' => $fields));

			}	

} else if ($row['privacyid'] == NULL){ //profile user has not selected a privacy mode
			return _phptemplate_callback('private_profile', array('user' => $user, 'fields' => $fields));

} else { //some error
print 'Privacy mode error';
}
  }

function phptemplate_profile_listing($user, $fields = array()) {
$link = mysql_connect("HOST","USER","PASSWORD");
mysql_select_db("DATABASE",$link);
$sql = "SELECT privacyid FROM privacymode WHERE uid = '{$user->uid}'"; 
$result = mysql_query($sql) or die ("Unable to run $sql: " . mysql_error());
$row = mysql_fetch_array($result, MYSQL_ASSOC);

	 if  ($user->uid == ($GLOBALS['user']->uid)){ //viewing own profile
	return _phptemplate_callback('profile_listing', array('user' => $user, 'fields' => $fields));

} else if ($row['privacyid'] == 2){  //public profile
return _phptemplate_callback('profile_listing', array('user' => $user, 'fields' => $fields));
	
} else if ($row['privacyid'] == 1){  //private profile

			if (@in_array($user->uid, array_keys(buddylist_get_buddies($account->uid))) && user_access('maintain buddy list')) { //user is friend
			return _phptemplate_callback('profile_listing', array('user' => $user, 'fields' => $fields));

			} else {  //user is not friend
			return _phptemplate_callback('private_profile_list', array('user' => $user, 'fields' => $fields));

			}	

} else if ($row['privacyid'] == NULL){ //profile user has not selected a privacy mode
			return _phptemplate_callback('private_profile_list', array('user' => $user, 'fields' => $fields));

} else { //some error
print 'Privacy mode error';
}
  }
  

?>

Let me know if you have any questions.