BuddyPress.org

http://yourdomain.tld/members/you/activity/my-friends

Where yourdomain.tld is of course your domain, and you is of course you. That will get you to your friends’ activity.

I like your idea about wigetizing the profile/home page, but I think that’s probably a ways away yet. It would involve splitting the member theme up into two specific themes; a public theme, and a back-end theme. One for yourself, and one for others basically. Most of the code could be snipped from the existing blog wigets, but it would mean that all of the current member areas would need to be turned into widgets themselves, which would be no small undertaking.