I agree that it should be able to reject a Friend Request, but don't think it should even need another option. Just fix the button that's already there so it works.

If we bring up the Friend Request window in order to answer the question, then we should be able to give it either answer, and "No" should be treated as being just as valid of an answer as "Yes". Saying that "No, we don't want to friend this person" is currently being treated as though it were saying "Well, maybe. Bring up the Friend window and I'll consider it and give an answer from there."

"No" should not mean "Maybe". "No" should mean "No". If we hadn't decided, we wouldn't have brought up the request window in order to answer the question.