As you'll see, that allows Facebook to tailor its ads to a much finer set of users than Google's search ads currently allow. That's why Google is pushing so hard on Google+.
All that profile information you've filled out over the years on Facebook? That's not just there for your friends and colleagues to see, or for self-expression. Facebook is also able to use much of it to target the advertising you see on Facebook. (And, eventually, potentially all over the Web, the way Google does.)
The easiest way to see how powerful this is would be to take a quick spin through Facebook's ad-creation tool. It's remarkably simple and straightforward. Just figure out what your ad is for and give it a title, some body text and an image.