There is a lot of buzz around this topic, so I won't add unnecessary detail. But I will offer a funny anecdote.
For those into Facebook, especially those who are bored and enjoy being offered silly activities to pass the time, change your Facebook settings. Instructions are in an article here by Lee Mathews.
You see, every time you take a quiz, offer a virtual lemon meringue pie, or ask others to join a cause like Save the meerkats from religious persecution, you use a third-party application - one that's written outside of Facebook. And when you click Yes after they ask for access to your account, they get access to everything, including your friend list and photos.
The original blog post that brought this issue to light was written by Cheryl Smith, whose picture was used in a Hot Singles ad, that popped up on her husband's Facebook page. She wasn't stepping out and he wasn't looking. You can read her blog here.
I learned of this (third-party) Facebook issue after my sister got a Hot Singles ad with my picture in it. Besides the obvious gross out factor, she did what most people would do: she posted a comment on her Facebook status, which brought everyone into the joke - kind of like getting pantsed again in front of my dorm (true story). Anyway, it was quite funny, and equally creepy.
Note to self: post this kind of stuff for the world next time and maybe you'll finally get that blog traffic you've always wanted.
Caveat Lector! (May the reader beware!)