There has been a lot of discussion about Facebook's advantages and horrifying pitfalls. A great way to keep track of friends' addresses, birthdays, and life events: yes. A potential reputation abyss: also yes! With bosses now screening the Facebook profiles of potential employees and police using Facebook statuses, groups, and photos to arrest people, there are plenty of reasons to keep your profile clean.
The problem, then, is not what you do to your profile, but what others do to it.
So you friended that fellow fraternity pledge back in freshman year and promptly forgot about it. Now you're a fancy TA, and while you're trying to talk about econometrics, your students are all on Facebook looking at that Beer Pong Championship photo he tagged you in. Suddenly your victory is not so awesome anymore!
It takes some real profile wrangling to undo this kind of damage. Luckily, Will has alerted me to an article that may help a bit:
Do This Now
After poking around the site and playing with all of the privacy settings, the two best things to do (in my opinion) are to disable photo search functions, and manage your networks and settings. Students shouldn't be able to see your profile, at all -- make it friends-only. And unless you've got some seriously questionable taste in movies, the biggest single issue on the profile is your name tagged on photos you did not upload yourself. Facebook's answer to these issues isn't perfect, but at least you get some control over what other people can see and search for.