Facebook has a number of settings for securing your profile, but it seems many people either don't know or don't care. When in doubt, set to "only friends".
Here are some of my setting recommendations:
Settings \ Privacy \ Profile \ Basic
Set everything to "Only Friends". By default everyone in your network can see your profile - and your network can contain many thousands of people.
Settings \ Privacy \ Profile \ Contact Information
Think carefully about this section. I would recommend setting most of these to "No one". In my profile, my website is the only thing set to "Only Friends". No one needs to see my home address, email address, or phone number - if you don't already know this info, then you can send me an email via Facebook and I can choose to share. Remember, Facebook is a great resource for identity thieves - why make it easy for them!?
Settings \ Privacy \ Search
Uncheck everything but link to add as friend and send message. I am fortunate in that I have a very unique name, so if you are looking for me on Facebook, you don't need a photo to make sure you have the correct person. Strangers also don't need to see your friend list - be nice to your friends and do a bit to protect them too!
Make sure you also uncheck "create a public search listing" - I don't want my Facebook profile coming up when people google me!!
I don't have a lot of applications on my profile, but I do have a few. So I can't choose to "do not share any information" So instead I have unchecked every box - applications I don't use have no reason to know anything about me! Also don't allow Facebook connect and Beacon.
Things to keep in mind:
Know your employer's position and policies on Facebook - if you list your employer on your profile, you could be representing them. And chances are, you are not paid to surf Facebook all day.
Remember, more and more employers are searching Facebook - drunken party photos don't look good when you are applying for a job. Do a quick google search, and you will find a bunch of people who have been fired, suspended, etc due to Facebook activity. Don't call in sick, and then post party pictures from the night before!!!