I find the Facebook privacy settings to be sufficient. I'm quite judicious about whom I allow to "friend" me and even then, most of those people do not have access to my photo albums or pics of me tagged by others. Of course, there are still some privacy concerns such as the world colliding issue Dave mentioned, but I haven't had any problems yet. For me, the risk is worth the reward of being able to easily keep up with friends and family that live all over the world.
Agreed! You can decide who you want as a friend and if you are worried about it in the least, maybe you should be careful who you add. The privacy settings are a big help as well. I like it because I can find people who I have lost touch with and it's fun to catch up with them.