Jay Goldman has written an excellent description of Facebook Beacon.

The long-and-short of it?

• When you're done using Facebook, log out of Facebook. If you're not logged into Facebook, Facebook effectively rejects Beacon info. (Note that because you've probably got lingering Facebook cookies even after logging out, Facebook still knows who you are and where you're coming from. At this point, it appears that they terminate the rest of the Beacon setup.)
• If you are logged in to Facebook, don't ever go anywhere else unless you want Facebook to know about it and potentially publish it. Facebook knows about every transaction sent by a cooperating site, even if you've chosen not to publish it.
• Consider AdBlockPlus on Firefox; other suggestions for IE are in the post.

The Beacon functionality is really pretty elegant, but it's useful to note that "Beacon" is an excellent name. Like other web beacons or web bugs, it uses embedded JavaScript, effectively tracking your movements around the web in very much the same way that modern web tracking applications do so. In essence, Facebook is making itself a web analytics service for advertisers.

The irony here is that the information collected by Facebook is likely far more valuable than the publication of that information and whatever ad revenue they may get from it. However, to get advertisers to buy in, they needed the Beacon profile entries. But just imagine being able to track the flow of collaborative purchasing information. Imagine I buy a Diet Coke, and that gets published to my profile. Suddenly, members in one of my Facebook groups starts buying Diet Coke shortly after my purchase is published. Not only can Facebook tout its ability to spread the word about the Diet Coke thing, but it also can tell Coca Cola the characteristics (including n-orders of social graph characteristics) of those who buy Diet Coke.

Powerful stuff. Scary. But Powerful.