Facebook continues to grow in popularity with the kids at my school. I think that most kids from 7-10, have a profile.
I started using facebook a couple of months, and I quite enjoyed connecting with some of my friends and relatives, the ones that I usually don't get a chance to see or to talk to on a regular bases. Connecting with people and socializing is critical; the Internet can't replace those f2f relationships, but this tool is powerful in keeping connections alive.
I encourage my students and my children to use the tool appropriately. Don't let it replace the f2f relationships. Rather, use it to nurture and even create some relationships. For some kids, it can give them some confidence in beginning a "converstation", but hopefully they don't become reliant on a tool to maintain or begin f2f relationship.