I'm studying japanese and sometimes a word comes up where the kanji is way out of my knowledge. I have to put a ban on it to keep practicing japanese and get something useful out of it.

But I have a question. Will the word be banned forever or do I have to manually get it back into the list?

You can later on manually unban it. It's a functionality on the web app under my words I think.
The system wouldn't know when you are ready to take it, or even if you ever want to take it.
If you are just interested in reading, but not writing it, e.g. you can also go to the list itself and change the settings for the word to reading & definition only. If you do that and later in decide you want to learn writing as well you need to reset that list, and it will readd all words that you skipped writing (except those that you have banned. Those are banned unless you unban them)
Keep it up;-)

I have been creating several new lists recently, after a period of aggressively banning words. I noticed that after saving my new lists I am notified that some of my new words are currently banned. This is a great feature, but the result is that I have to go to the banned words list and scan through to find the words that I now want to un-ban as I prepare to study the new list. It would be nice if the initial Skritter prompt would show me just which words were banned and let me un-ban them from that screen.

@podster: It sounds like you may be looking for: http://www.skritter.com/vocab/banned

Thanks, Jeremy, but going to this list is the situation as I am describing now. The link you gave shows me ALL of my banned words, but since the prompt when adding a new list only says that SOME of the words on the new list are currently banned, my immediate reaction is "which ones?" Ideally the prompt would look something like: "the following words in your new list are currently banned. Which of them do you want to un-ban?"

Hi there
If you open your list, you can see behind each word how well you have learnt it in shades of green and with a red mark if you have banned it. Isn't that the functionality you are looking for?

I'm not sure; if I find a banned word on a newly created list by viewing the list can I un-ban it from that screen? Or do I have to scroll through the entire list of all banned words?

Right! You can un-ban a word from a newly created list by going through the contents, spotting the red circle with a line through it, clicking on the word, and then the "Unban this word" button from within the information popup, and then you can deselect which parts you would like banned.

Jeremy,
Excellent, thanks. I'm also just today starting to play with starring words on the iOS app. It looks like I can un-star words too, which I think may have not been the case before. But I am interested in the slider to adjust "star emphasis."