The ignore list dialog has a checkbox for "show only buddies" if you search for a membername.

I'm seeing the same thing HoopZ is... tried to ignore someone, can still see their posts, in the default blue/white theme.
EDIT: I was wrong. I was using the Classic YabbSE theme. Changed to the default and ignore works. I see the
posts but the
content is blocked. There is a "user is ignored" message instead.

EDIT2: Confirmed... works in the SMF Default theme but not the Board Default.