(1) I always tell my students that privacy is never guaranteed on the Internet.
I still believe that, but cultural anthropologist Dr. danah boyd (yes, her name has no caps), considered by many to be the "high priestess" of social media, says that everyone expects privacy on the Internet and that they are entitled to it. She gives examples of how Facebook, Google, and other developers can work toward insuring that privacy.
Privacy is Not Dead: Danah Boyd Talks about Privacy at SXSW (a ReadWriteWeb.com article)
(2) Here's a fascinating 14-min. video interview on Discover Magazine where danah (I'm hoping that it's okay to refer to her as danah, but she's a Dr. ala UC Berkeley) gives us a historical/sociological view of why teens like to "hang out" on social network sites. She provides excellent insight to educators.
P. S. She was the keynote speaker at the opening ceremonies of the 14th National AASL Conference in Charlotte, NC, in November, 2009. What a treat it was to hear her speak!