Thanks to Misty for bringing attention to this new Facebook feature.
Facebook is adding a new feature called Places, similar to FourSquare that some people use with Twitter. It allows a person to share their location with friends via their mobile phone.
You can read more about Facebook Places in this Washington Post article.
For the most part, it's something you would have to intentionally use and you may not need to do anything else to your privacy settings since it supposedly defaults to Friends Only. The feature that could worry some people is the ability to check-in their friends. Your friend could check you in to locations that you may not want others to know about. However, according to the Post article, "your friends can't start tagging you as being present until you authorize that activity."
If you want to make sure, here how to Disable that feature.
First go into your Privacy Settings:
Then into Customize Settings:
Scroll down and look for Friends can check me int to Places under Things others share:
To the right of that there is a dropdown you can set to Disabled. On my account, this option was neither Enabled of Disabled, it was set to Select One.
If you have no intention of ever using the Places feature, you may as well set the Places I check in to Only Me and disable the Include me in "People Here Now" after I check in option.
Scroll back up and look under Things I share:
Uncheck Include me in "People Here Now" after I check in and then click the the drop-down beside Places I check in and choose Customize and change These People to Only Me.
Save the changes and you're all done.