People You May Know finds people within six degrees or so of separation and suggests them as potential friends. It appears that the threshold is set at four, meaning you are connected to four of the same people as the suggested "friend." FriendFeed has taken a somewhat similar approach for recommending new people to "follow."
This type of recommendation engine, which taps into the social graph, is like a Las Vegas slot machine that keeps on giving. Every time you pull the lever you get a bunch of new friend connections, which makes you want to keep pulling the lever until it runs out of recommendations.
The end result is that Facebook generates some exponential growth, creating more density in its web of people connections. And, Facebook members now have an easy way to find new connections based on relationship proximity, as well as a potential source of irritation as they get inundated with friends of friends requesting connections.
Along with the new privacy options, the forthcoming chat service, and People You May Know, Facebook is making some smart moves to stay ahead in the social-networking game.