When you fill out insurance forms, they often start by asking "how many people do you want to add", which seems to work. You then display the form that many times, changing the heading each time. The downside is that it feels a little rigid.
Alternatively, have a tabbed interface, not unlike a browser, including as that last tab an "Add new" item. most people are sufficiently au fait with the tabbed browser interface to get this, I would think. This may depend on how you are able to redisplay the form ( I am not a rails person ).
Is there a reasonable limit to the number they are liable to include? Are they really going to include all 300 people on the facebook friends list? Or are they liable to add just one or two? This may impact the appropriate interface format.