Cynicism aside, I kind of get what they're trying to do - minimise the barriers to active participation in social networks (and therefore maximise the effectiveness of targeting) because it figures out things like tagging and networks for you. Unfortunately for them, I think the hurdle of "can I be bothered to join yet another pointless, invasive service" is a bigger one to cross than "can I be bothered to tag all my photos on Facebook". Even with inferior technology, I'd fancy Facebook could build a better model of which friends I associate with the most and where, if they wanted too.

Then there's the problem voiced elsewhere that intentionally collating all that data is just a bit too creepy, and I say that as someone who couldn't care less about Facebook privacy settings and thinks CCTV in public places is generally a good idea.