1) Identity Theft
This is the obvious one. You may think you are being clever, releasing only partial information about yourself, but smart fraudsters can easily piece bits of information together. Often they will contact individuals claiming to be an old school friend so that they can gather more personal information about them. The key point is that nobody really knows who they are talking to on social networking sites, so think carefully before you post information about yourself.
2) Stalkers
Social networking sites have proved to be a top-class hunting ground for stalkers and paedophiles looking to groom children, because they allow them to remain anonymous. There have been high-profile cases in which serial sex offenders have taken on a false identity and established online friendships with children before meeting up with them.
3) Your real friends can unknowingly make you vulenrable.
Your security is only as good as your friend's security. If someone in your network of friends has a weak password and his or her profile is hacked, he or she can now send you malware, for example. There is a common scam called a 419 scam, in which someone hacks your profile and send messages to your friends asking for money - claiming to be you - saying, "Hey, I was in London, I was mugged, please wire me money." People fall for it. People think their good friend needs help - and end up wiring money to Nigeria.
4) Display Banner Advertisements.
Facebook has not been able to screen all of its ads. It hasn't done a great job of vetting which ads are safe and which are not. As a result, you may get an ad in your profile whey you are browsing around one day that has malicious code in it. In fact, last month there was an ad with malware that asked people to download antivirus software that was actually a virus.
Thank you!
Information taken from: http://www.suite101.com/content/dangers-of-facebook-and-other-social-networking-sites-a311770 & http://www.cbsnews.com/stories/2010/05/08/earlyshow/saturday/main6469373.shtml?tag=contentMain;contentBody
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