Just got the news through Slashdot. Facebook's been talking about their breakthrough in privacy controls for quite some time. They have an elite team working on it and they are highly motivated to resolve the issue. Its pure business logic. A sense of privacy encourages the free expression and authenticity needed for Facebook to become more effective at targeting ads. So I suppose it was inevitable. And Zuckerberg has been filing patents to beat the band. Here's most of the excerpt from Slashdot:

...but take a gander at the Facebook founder's patent application for Dynamically Generating a Privacy Summary to get an idea of what's in the works. After you check boxes on a form to indicate that 'Everyone from San Francisco, CA, Social Network Provider, and Harvard' can see your profile, Zuckerberg's 'invention' will miraculously display: 'People from San Francisco, CA, Social Network Provider, and Harvard can see your profile.' How dare Rolling Stone question his inventiveness!"

Ahem. Not exactly the earth shattering advance we've been primed to expect. All kidding aside. I imagine its really only a matter of time.