How does ignore affect interactions with team mates?
They can still see everything you say in chat, and all of your minimap pings unless they ignore you as well. You will no longer be able to see their minimap pings.
The commands to ignore someone for a single match is: (entered into chat)
/mute playerName
To ignore someone permanently:
/ignore playerName
Sources: http://leagueoflegends.wikia.com/wiki/V1.0.0.86 under 'General' for minimap pings. http://na.leagueoflegends.com/learn/chat_commands for ignore commands.