It happens sometimes that when you add a new friend to the Gmail chat, email address is added as their contact name, such as hikingfan@gmail.com. Everyone wants to display names of their friends in the chat list so you will never be confused as to who's who. The only way to change this, people used to go to contacts, select contact profile, add the name of the friend, and then save it.
Now with the new version of Gmail (launched for Firefox 2 and IE7) you can correct the above problem by editing your Gmail contacts directly from the chat list. You just need to hover your mouse pointer over one of the contact, you will get a pop-up with the contacts details. If you click on the contact name, it will automatically become an editable field. Now simply type the desired name and hit "enter". Your changes will save the name in your chat list as well as in your contacts.
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