This man page refers to an old version and needs to be updated
Blog #1 is configured to have a special behaviour: it aggregates ALL categories of ALL blogs on the system.
To hide blog #1 or any other blog from the blog list, uncheck "Include in public blog list" in the Blogs tab.
Many bloggers have a list of blogs they read (and recommend to others) on the side of their blog page. This is often refered to as a BlogRoll. Basically it is a list of links.
b2evolution's approach to the BlogRoll is to use a dedicated blog in which each list entry is simply a blog post with mainly a title and a URL. The only differences with a normal blog is that the posts are displayed in a compact list style and that they are orderred alphabetically and/or by category instead of being displayed chronologically.
Several blog templates (for example _main.php in the "custom" skin) include a specific blog as a BlogRoll next to the main blog's posts.
You will find the code that displays the blogroll in /skins/_blogroll.php. It is actually nothing but a simplified to the max version of a regular blog template.