~ how to ~
First I suggest putting certain friends into groups so you can choose who will see what. For instance you could put all your business contacts or kids you work with into a group and limit what that group can view. Or to simplify, create a group called limited profile who will only see certain information. Every time you add a new friend you can put them in the appropriate group and they will automatically have the proper settings applied to your profile.
Protect Your Privacy
To control your privacy settings, click on "account", "privacy settings", "customize." In here you can customize what people will see. I have most all of mine set to "friends only" except for a few I choose to alter with more custom settings. For instance, since you can't control other people's photo privacy settings, you may choose to change settings for "photos and videos I'm tagged in." To do so, click the setting button and select "customize," then "friends only" and in the "hide this from" bar begin typing in the friend group you created. Or you can use one of those friend groups to create a select group that will see everything like family and close friends. Instead of selecting "friends only" select "specific people" and type in the group who you want to see that information. You can use these custom selections for any of the privacy settings.
Protect Your Photos and Videos
Photo album and video privacy is done per album/upload. To alter settings for past uploads go to "account", "privacy settings", "customize," and under "things I share" select "edit album privacy." The settings can be customized the same way as the others I listed above using selected groups.
Make Granny Proud
These privacy settings are really great tools to protect yourself online. That being said, I would still urge you to use caution with what you choose to post. No matter how you protect yourself, there is still a chance someone else could view your information. A good rule of thumb is never put anything on there that you get you in trouble at work or disappoint your grandmother should any privacy settings slip up or change in the future. My super-hip grandma is my Facebook friend and she can see everything on my profile (not that I'd do anything to disappoint). You never know what people will do with info or photos on Facebook. Remember people can still save photos and share them even if they can't share your albums. Be sure you don't have personal information like your address or phone number in the "about" section or in your photos.
Happy Facebooking!