In this case, Microsoft evidently has no problem with the applications themselves, just with developers charging cash money for them, so it's really looking out for you here. If you've held off on trying one out, we've included links to the three we could find (one isn't free yet, but we expect it will be shortly). Take 'em for a spin around the 'net and report your findings back here.
Source – 1337pwn XBOX Live Friends List AppStore Application is now FREE
iTunes – 1337pwn (now free)
iTunes – iLive (still $1.99)
iTunes – Xbox LIVE Friends (formerly iXboxLive; now free)