The EFF has an article on the changes to the privacy policy at Facebook over the last few years noting five significant changes (downgrades) since 2005. In short Facebook has flipped from a private social network to one where your data is largely public by default, mainly since Facebook can profit by selling this information to advertisers and business partners.
Here is the 2005 privacy language
No personal information that you submit to Facebook will be available to any user of the Web Site who does not belong to at least one of the groups specified by you in your privacy settings.
and the April 2010 version
When you connect with an application or website it will have access to General Information about you. The term General Information includes your and your friends’ names, profile pictures, gender, user IDs, connections, and any content shared using the Everyone privacy setting. ... The default privacy setting for certain types of information you post on Facebook is set to “everyone.” ... Because it takes two to connect, your privacy settings only control who can see the connection on your profile page. If you are uncomfortable with the connection being publicly available, you should consider removing (or not making) the connection
Quite a change. Matt McKeon has produced an interesting interactive infographic to depict privacy erosion on Facebook over the last 5 years
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