Ironically you do it from your FRiends list (much like shutting down Win 7 via the Start button ..)
Click onthe Messages icon in top right of screen (the little envelope)
Pick the Friends icon (the linked/shaking hands)
Click on the Enemies button in top right
Click on the delete icon (the dustbin) in the list against the name you wish to remove from your blacklist - you will be prompted if you are sure, click on Yes.
