Facebook has just rolled out a new "Nearby Friends" feature which joins a bunch of other location-broadcasting apps that are already available. Nearby Friends will allow you to see which of your Facebook friends are close to you.
The new feature is an opt-in option, where you'll have to enable it on your account. The service will let you see which of your friends are nearby, but you can turn the location tracking off whenever you want. Both you and your friends will need to have it enabled in order to see each other on the map, but once it is activated on both sides, you'll receive a push notification telling you that your friend is nearby.