I use it frequently. I'm part of a large, loose group of friends that hang out at my college. It's large and loose enough that no one person in the group has the contact info for everyone else, but it's enough of a clique that if you mention "the group" to anyone in it, they'll immediately know who and what you're talking about. We're talking 30+ people here, every one a nerd. We use facebook to keep in touch and coordinate everything from parties to weekly D&D games.
In our case, Facebook isn't so much a seperate world as it is an extension of face to face contact. I don't like the way it handles privacy concerns, but if the site goes too far, the owners will eventually get sued over it, so it's not too big of a deal. I even like the fan pages; you have to be careful which ones you join, but they can be pretty entertaining, much like a forum or a blog.