Hi,
First thing.
The Buddies Menu > Block item (And Buddy's Name)
And the Share options don't seem to be the same Names. (even though you have edited/smudged them)
If the person is in the Address Book and their card details their "Real Names" and iChat Screen Name the Buddy List and the Buddies Menu would list their "Real Name".
The Main Issue
So you have not managed a Video Or Audio Only chat before.
It is a Yahoo Account on both computers.
Both computers are Macs and using iChat.
Highlighting Buddy does not enable the iCons at the bottom of the Buddy list (Or Darken the text in the Buddies Menu for same)
Do you get green Video or Audio icons next to the Buddy's Pic in the Buddy List ?
Example pic of an AIM List
If a Buddy is in a Jabber Buddy List (GoogleTalk or FaceBook as well as other Jabber Logins) or a Yahoo Buddy list logged in via the Yahoo for Mac App or more likely logged in via a web browser (like GoogleTalk chats) then this may take priority over the iChat Login.
If this is the case then you may not see the Video or Audio green icons.
That is to say that Jabber Buddies can be logged in to their server in various ways.
GoogleTalk and Facebook both have web Browser logins that can access Chat.
iChat has a Jabber side and it cannot Video Chat to these logins (only iChat to iChat)
Yahoo is the same. (which you seem to acknowledge in the first post).
I am suggesting that one of you has a additional Login which is confusing things.
The issues about the Name behind the blurring appearing to be different is not something I have seen before.
This may be an Address Book issue or may be related to a dual login.
7:34 PM Friday; March 23, 2012
Please, if posting Logs, do not post any Log info after the line "Binary Images for iChat"
iMac 2.5Ghz 5i 2011 (Lion 10.7.3)
G4/1GhzDual MDD (Leopard 10.5.8)
MacBookPro 2Gb (Snow Leopard 10.6.8)
Mac OS X (10.6.8),
"Limit the Logs to the Bits above Binary Images." No, Seriously