Maybe something like:
[first paragraph as is]
[XML] If you have a feed you would like to add to your Friends list, you will need to know its URL. The site's RSS or Atom feed URL may be linked from an XML button on the site's main page, or from a text link. You can also contact the site's webmaster or support for assistance.
To add the feed, enter its URL at the bottom of the Syndication page.
* If the feed URL is already being syndicated to LiveJournal, you will see an Add Friend page with the feed's username.
* If not, and if you are a Paid or Permanent user, you will be able to create a new syndicated account for this feed URL. LiveJournal will prompt you for a username; this must be something that is not already in use. Once you have entered your desired username, the syndicated account will be created and you will see an Add Friend page with the feed's username.
[rest of FAQ as is]