Recently, Facebook made changes to its privacy policies, giving users more control over their personal information, including restricting access to individual status updates, etc.
One of the weak points in Facebook privacy has been applications and quizzes. When you decide to use an application in Facebook, like to rate your favorite movies, or play Mafia Wars or Farmville, the application acquires your personal info, and that of your "friends." This setup makes it possible for friends to interact in games etc. However, application developers--who are not part of Facebook--could get that information and use it for whatever they want. And if your friend uses an application, that application can get information on you, even if you don't use it.
It is a good idea to look at all of your privacy settings and make sure that they are set the way you want them. Facebook can be fun, or a big time-waster; but no matter what, there are things you can do to protect your privacy when using it.