I was hesitant about FB for our kids, too. But I have an account and eventually realized how many of their friends already had accounts. I think the kids were 10 and 14, when we finally let them sign up. Here are our ground rules:
* DH and I must know their passwords.
* We are in charge of the privacy settings (and they're strict).
* Don't post about where you are right now. If you go someplace wonderful, post about it afterward.
* Don't let friends post on your account. Make them sign onto their own, if they have something to say.
* FB is not the place for anything negative. No cutting down or griping about other people. What you post online sticks around a lot longer than whiny thoughts do, in your head.
* Before you hit Enter, ask yourself whether what you're about to post is OK for your grandmother and your Great Aunt Patsy to read. (They're FB friends, too!)
We do, indeed, log onto the kids' accounts periodically, to check that the privacy settings are the same; that they haven't befriended anyone we don't know (a kid from school we don't know would be OK, but not some random adult from Chicago, KWIM?); and what they and their friends are talking about. Yes, it feels like spying. But if you simply go to their Home page, while logged onto your own account, you won't see all the posts from their friends, or things they've posted and blocked you from seeing, or whether they've changed their privacy settings. And they are still young, and we're responsible for them.
The only problems we've had are occasional use of bad words; and the twins' "friend" convincing them to let him post on their account (and he posted vicious, nasty things about other kids at school, which he never posts from his own account, since I assume the little coward is afraid of retaliation!) We handled it by making the kids delete the problem posts; post an apology/explanation, when appropriate; talking about "netiquette"; and grounding them from FB for a while.
Overall, the fun and the help connecting with their friends has been well worth the few problems we've had - which are, after all, learning experiences.