The Ignore List is a list of caches which you do NOT want any notifications or updates on (the opposite of a Watchlist).
If a cache is placed on this list it will not appear in the GPX, ZIP or RSS files available from the caches list page, nor will it appear in the list of caches on the screen.
A cache can be added to this list by going to that caches particular page and clicking on 'Ignore' in the sidebar on the right.
You can view/edit your Ignore list my going to the My tab and selecting 'Ignore List'
At the moment you will need to remove this from your Watchlist if you have it there also.
This feature does not have any effect on the mailed out version of the state GPX files as these are non-user specific.