Here's an example inspired by wyliekat's comments. You read your friends list prior to leaving for vacation, and click on a button on your friends list. You go away on vacation. You come back a few days later, and there are, say, 1000 new posts from your friends. Wouldn't it be nice to be able to jump straight to the last post you read before vacation and then start moving forward from there? Since you bookmarked your spot, you just go to http://www.livejournal.com/~username/friends/bookmark (or whatever) and go straight to the spot you left off. You remove the bookmark, read half of them, and then leave a new bookmark and go back to dinner. The next day, you go back to the bookmark, remove it, and read up to the present time - all caught up, and no time wasted clicking back through hundreds of posts trying to remember the last one you read.
You're at work, or it's late and you're tired, whatever. You skim through your friends list, looking for important posts, long or lj-cut posts, or posts you want to comment on, whatever. However, you don't have time to read them all and comment on them all - but you'd like to, next time you get a chance. So you just skim through, marking each post that looks like it's worth going back and putting more time into.
You get home, make a cup of tea, sit down in front of the computer with some time to spare. You want to go back now and read those posts in more detail, take the time to really go through them, answer the polls, leave comments, etc. So you just go to http://www.livejournal.com/~username/friends/flagged/ or something and the only posts you see are the ones you flagged earlier. You work through them one by one, removing the flag from each as you finish, and then get back to regular friends-list perusal.
Yes, both features can be gotten around simply by paying attention and by being patient, but, well, hell with that. Computers are supposed to make our lives easier, I don't want to be patient OR pay attention when I'm just skimming through my friends list. Let the computer do it for me.