I found an interesting article that looked at a study conducted that stated that people who used Facebook tended to be happier, however they missed one important variable with their participants, they were mostly all extroverts. This article addresses the fact that most people who are more extroverted tend to use Facebook more and tend to be happier in general, not because of Facebook.
They also looked at how important Facebook is for developing youth and self-expression. I don't know how much I agree with this, however I do not know what it is like to a developing teen these days! (Because that was SO long ago!) I don't know how my life would have been different if Facebook would have been part of developing my self-expression.
http://www.swissinfo.ch/eng/swiss_news/Only_extroverts_have_Facebook_happiness_factor.html?cid=7670126
Wow, I'm surprised that the Michigan State University study overlooked that in their original study. Many of my professors have often spoken of their psychology programs very highly. For Industrial-Organizational Psychology, I think their program is considered to be one of the very best.
This reminds me of the finding in I-O Psych where it was found job satisfaction often has a lot to do with one's overall personality. People who are generally satisfied with their lives also tend to report being happy about their jobs as well as most other things.
I think it is interesting to think about the positives and negatives assoicated with facebook. As with almost anything else, you will have some who glorify it and others who vilify it, with most people falling somewhere in between. I have met some people who are, for whatever reason, very much against facebook because they believe it is leading and will lead to less face-to-face contact and that this will take away meaning and depth from friendships.
Personally, I do not really buy this argument. I believe facebook is largely what each person makes it - some people just use it a couple times a month to stay in touch with friends, some use it for political networking, and others use it extensively for planning and organizational purposes. It is not inherently good or bad. As for the developmental implications I am not sure. Some have said that sites like MySpace and facebook may help teenagers develop their sense of identity, but whether this is true may primarily depend on other factors such as personality type and other individual characteristics. I think there may be considerable risk in having too much personal information publicly available. Aside from the concerns about one's employers seeing pictures of you drunk, there are also other security concerns that arise.
Given the dramatic growth of facebook in the US and internationally, I think it may be important to examine the effects that facebook has on individuals, but as the original article said, researchers must be very careful to eliminate as many confounds as they can.