1. Facebook Privacy Level: Everyone
"Everyone" is the most public of Facebook's privacy levels. Everyone can see information you set at this level, be they your friends or total strangers.
If you want to make yourself easier to find and identify on Facebook, you can set some information, like your profile, visible to "everyone." But if you want to keep a low profile, you should avoid using the "everyone" privacy level.
2. Facebook Privacy Level: Friends of Friends
"Friends of friends" is the next most-inclusive privacy level, after "everyone." Not only can people you have added to your Facebook friends list see information you post with the "friends of friends" privacy setting, but everyone that each of those friends has friended as well. Since you have no control over who your friends add, you lose control over who sees the information you post.
On the other hand, if you have a fairly high confidence level in your friends, or you want to help people you might know find you more easily, you could put some of your less personal information (like your profile) on the "friends of friends" privacy level.
3. Facebook Privacy Level: Friends
The Facebook privacy level "friends" allows you to show information only to those people you have added to your friends list. Presumably, if you've added someone as a friend, you know who they are, and can decide whether you want them to see the information you're posting.
4. Facebook Privacy Level: Some Friends
The "some friends" privacy level lets you determine the exact people who can see the information you post with this setting. You can enter names of specific people, or you can add a group that you've set up with Facebook Friend Lists.
5. Facebook Privacy Level: Only Me
"Only me" is the highest privacy level on Facebook. Only you will be able to see the information you post with this setting, none of your friends.
Facebook offers privacy levels as an easy way to control who has access to your information. But remember that the best way to prevent sensitive information from being leaked publicly is to avoid posting it on Facebook in the first place. People have been fired, denied application to colleges, and just plain embarrassed for things they've posted on Facebook.
In other words - when in doubt, leave it out.