I just tested this out with a friend of mine. He put on "Friends Only" I left "Everyone" on. I could hear everyone in the lobby room, he couldn't. And I was able to talk to him still. He kept asking if anyone could hear him, but no one else responded. I don't know if they were ignoring him or not, but so far it seems like that privacy setting works great for having a friends only chat!
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"If you stay here too long, you'll end up frying your brain. Yes, you will. No, you will...not. Yesno, you will won't." -Guy in Moonside
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