From the vBulletin user forum:
"The built in ignore system that comes with vBulletin only allows you to stop viewing the ignored members posts, but say they were the last person to post on a thread, their username still shows up as the last user to post even though they're on your ignore list."
Interesting - I dont think the user knows they are being 'ignored' - you could always PM the user and tell them they are being ignored
Frank