Most people have heard a couple stories where the police or a prospective employer has taken a look at someone's Facebook or Myspace page and found out something damaging. It does happen. It will continue to happen. But there are limits to how useful the information on social media sites actually is. The following guide (issued by the Office in which I work) has helpful tips to people on both sides of the the equation. It won't apply everywhere, but it could still be useful.
If you think you've been damaged because of inaccurate, outdated, or irrelevant information posted in a supposedly 'friends only' post, or, hell, even in a public post, you can apply to either your local Privacy Commissioner or Ombudsman, or the Federal Privacy Commissioner. Most of Canada's privacy laws require companies to make 'reasonable efforts' to ensure the information they use to make decisions is accurate. Surfing Facebook doesn't actually cut it (in my opinion).
Anyway, more stuff to feed to your brain... enjoy!