I heard several Japanese people calling their very close friends with -shi at the end. In kind of a fun-making way. In what situations is that applicable?

I guess in all situations were making fun is okay. That's almost always if you do it right and never if you suck at being funny.

http://en.wikipedia.org/wiki/Japanese_honorifics#Shi wrote:

Shi (氏 【し】?) is used in formal writing, and sometimes in very formal speech, for referring to a person who is unfamiliar to the speaker, typically a person known through publications whom the speaker has never actually met. For example, the shi title is common in the speech of newsreaders. It is preferred in legal documents, academic journals, and certain other formal written styles. Once a person's name has been used with shi, the person can be referred to with shi alone, without the name, as long as there is only one person being referred to.

http://ja.wikipedia.org/wiki/敬称 wrote:

氏（し）
肩書きを別にして紹介する時に使用し、一般的に話し言葉ではあまり使われず、書き言葉または報告や報道といった改まった場面で用いる。また、古風には「うじ」とも読むが（用法は同じ）、同様に通常ではほとんど使われない。
トキワ荘系の漫画家が日常用いられてきた（『まんが道』で描かれているほか、いしかわじゅんが手塚治虫から「いしかわ氏」と呼ばれたとエッセイコミックに書いている）。

大辞泉 wrote:

し【氏】
[名]同一血族の系統。うじ。話し手·相手以外の第三者。代名詞的に用いる。「—は静養中」〔接尾〕氏名に付けて敬意を表す。主として男子に用いる。「佐藤—は欠席」氏族の姓氏に付けて、その氏族の出身であることを表す。「藤原—」助数詞。敬意をこめて人数を表すのに用いる。「三—の御執筆」

スーパー大辞林 wrote:

し [1] 【氏】
■一■ (名)
「うじ(氏)」に同じ。
■二■ (代)
三人称。男子に対して,敬意をこめて用いる。彼。「—は斯界の先達であります」
■三■ (接尾)
(1)人の姓名に付けて尊敬の意を表す。主として男子に用いる。「山田太郎—」
(2)氏族の名に付けて,その氏族の出身であることを表す。「藤原—」
(3)助数詞。尊敬の意をこめて人数を表すのに用いる。「人(ニン)」の尊敬語。「御出席の三—」

類語例解辞典 wrote:

An Introduction to Japanese Syntax, Grammar and Language (Michiel Kamermans) wrote:

Last edited by xaarg (2010 April 03, 5:46 am)

Thanks, that kind of helps. However the person using 氏 was not really an otaku, nor was the person referred to. Also, the person referred to was a woman, which I think makes a difference.

Alright, First-Hand account, given to me from my girlfriend (from Hokkaido, so I'm not sure if there's a difference)

Mainly used between women, although not necessarily limited to it (most of her friends are girls, so it makes sense).
The best example that she gave went like this:

Take my friend Itsumi-chan. We graduated together, and no matter how close of friends we become, I will never take off the -chan. But, if she started working at the same place that I do (sort of as a kouhai), then it would be weird to say "-chan," but I wouldn't want to just say "Itsumi" either. In this case, I would say "Itsumi-shi"

I ask, "so it's kind of used in formal situations between friends?"
She replies "yeah, it can be used like that, but not always"
Me, "So, can you use it when just hanging out? Like out drinking or something?"
Her, "Yeah, there's times like that, too. But you don't do it with people with weird names"
Me, "What are weird names?"
Her, "Well, you know your friend, Casey. It would be weird to say Casey-shi, ケーシーシ, wouldn't it?"

She had no problem saying "yes, his happens," but had a difficult time trying to explain how, when, and the situations.
I think it's just instead of -chan in situations where you can't say -chan, like work, perhaps.

Hmm, I have no first-hand experience with it, but from what I gather it sounds like that could be a possible case.
Close friends except with age difference, so it's subtly expressing the "i'm older" or "you're cute and young" thing?

No problem, I'm actually curious to figure it for sure, as well. But she didn't really know how to explain it, and I don't really like pestering her with Japanese questions (I like our relationship, as opposed to our language-sharing)

Hmm... I didn't know that.
Isn't 殿 used ONLY for the emperor?
I swear I have seen it somewhere.

Thora wrote:

Is it 「使い方の分かる類語例解辞典」(小学館)?

Yes, it is included in Dictionary.app of MacOS X Leopard and Snow Leopard.