Users that you have added to your Contact list are considered "Contacts" or "Friends".

In the File->Options->Privacy tab you can choose to accept incoming calls or messages only from people on your Contact list and on File->Options->CallAlerts and TextMessageAlerts you can configure different alert levels for incoming communications based on whether the other party is in your Contact List or not.

Authorized users - HGC-Skype protects your privacy by showing the fact that you are online only to those users that you have explicitly authorized to see this information. When another user adds you to his/her Contact list, you'll get an Authorization Request pop-up dialog. If you "Accept" the request, the user is considered authorized by you. If you "Deny" the request, the user will not become authorized (note that nothing is communicated back to the requester). If you "Ignore" the request, the request will be shown on the "Start" tab until you want to deal with it. Note that in the File->Options->Privacy tab you can choose to accept incoming calls or messages only from people that you have authorized.

Blocked users - If you block a user, the user will no longer be able to communicate with you (and vice versa). You will always appear offline to the users that you have blocked. You can edit the list of blocked users in the Tools.ManageBlocked users dialog (or under File->Options->Privacy->Manage Blocked Users dialog).