Facebook has announced it's new privacy settings today. It is too early to say what (if any) impact this will have. It is also too late for Facebook to be trusted. From what I hear, I don't yet see a basic change in Facebooks understanding of peoples view of privacy. I also think that the assumption that people are willing to relinquish their privacy just to get a free or convenient service is incorrect. Look at the Buzz fiasco: in a nutshell, Google connected a service which contained private information (gmail) with a public service (buzz).
For many, Facebook was a service for private information. Sharing was for group of select people. One of the issues was that people with 4,000 so-called friends are not the same as people with 40 friends. For the former Facebook was the same as Buzz or Twitter - a megaphone; for the latter, facebook was the same as gmail or hotmail - a telephone. Expectations and usage were highly different.
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