Purely opinion: I miss the Friends list on the left of Settings (bookmark) page.
Yes, I want this back as well. Why don't we have a section for friends anyway, on our profile or something? O_O
As for the avatar thing, it's just a personal choice. I just dislike it. A choice would be nicer than a forced one, IMO
Many of us have quite a large friends list, and it usually means the settings page is stretched down a long way. Plus, I find it neater the way it is right now. If you're having trouble finding your friends in the list, perhaps use Ctrl+F?
Also, for the avatars next to the names, I'll agree that they're pretty ugly. But I really don't care that much, so I'm fine with it staying the way it is. In my opinion, it only works for peppy's avatar (and stuff that looks similar).