At the heart of the current debate are changes that Facebook has made in the interest of full disclosure ahead of its upcoming IPO. Some of the changes seem to suggest that Facebook could venture into a broader advertising network that extends beyond just Facebook. In that case, some information posted within Facebook could be shared outside of the social network on ads on third-party sites.
If you've ever used a tool like the Outlook Social Connector, though, you know that many people are inadvertently exposing a wide variety of personal information to the general public. The Outlook Social Connector links to Facebook and other social networks to integrate information about your contacts and display it in Outlook. Often, you are able to view status updates and personal information from people who aren't even in your social network because their data is open to the public.
Facebook has privacy and security controls available to enable users to choose who can see their data. The trick is, users need to know they exist and actually use them.
If you click on the drop-down arrow at the upper-right corner of the Facebook page--next to your profile picture and name--you can open up the "Privacy Settings." You can choose whether your posts are viewable by the Public, or just by your Friends, or restrict visibility to a custom list.
There are settings to control who can view your personal information, who can send you Friend requests, and who can send you Facebook Messages. There are settings to control which Friends can post on your Timeline (or if they can), who can view posts from others on your Timeline, who can Tag you in posts, and who can view posts that you've been tagged in. There is even a setting to outright block access to your Facebook profile by specified users. The level of control within the Facebook Privacy Settings is fairly detailed.