There has been a lot of excitement in the privacy community around the introduction of a social location service by Facebook. Having blown the dust off my test account, I don't really understand all the fuss.
It appears that this capability only applies to mobile devices right now (although I have blogged in the past about the ability to locate your computer). When using the mobile site, or the FaceBook app, there is a button that allows you to "Check In" at your current location. It appears that this is exclusively an overt act, and that nothing is taking place passively in the background.
The privacy defaults (at least for me) were fairly restrictive. My check-in is only shared with "friends" by default. The only really interesting setting was that it defaults to show your location to others who are checked-in at the same location around the same time, but that was easily changed.
The FAQ talks about and links to the privacy settings in a prominent way. It feels strange to say this, but I don't think they have done a bad thing here. Obviously there are major privacy and security implications to telling people where you are all the time, and it may lead to stalking and/or home robberies, but you really have to ask them to do it to you. Caveat emptor.
Of course, none of this should suggest that I have any intention of ever using the service myself.
I note that most of the other social location players, like Gowalla, Yelp, Booyah and Foursquare were at the announcement. This could certainly impact them in a big way, either for good or ill. That seems like the real story, and my thoughts on that are well out of scope for this blog.