Facebook last week launched some privacy settings that give users the option of targeting individual posts to specific people or groups of people. But most significant about the new settings, I think, is that they require every one of Facebook’s 350 million users to run a “transition tool” to review their old settings and decide whether to select new ones.

This isn’t an optional step. Users will be able to “skip for now” the privacy wizard on the first encounter, but they’ll eventually be required to complete it to access their Facebook accounts.

Unless you want to customize the settings, it’s possible to zip through this privacy wizard quickly. But at least it forces you to think about privacy — if only for a minute or two — as a condition of being able to continue to use the service.

As I thought about how to configure my own privacy settings, I realized how little thought I typically give to such questions as who on Facebook gets to see information about my family and relationships, my work and education, and the posts that I create. Going forward, I’m sure I’ll stop thinking about these issues but — for a moment — they were upfront and center.

It reminds me of how many things we do on the Web without really thinking about them. Just about every site we interact with has some type of privacy policy, but how many of us actually read them? I sometimes skim the policy if it’s a site that’s asking for

personal information, but skimming — especially for a non-lawyer like me — is far from understanding. And truth be told, there are times when I’ve failed to even click on a site’s privacy policy.The same is true with “terms of service,” or TOS. These terms — which are on Facebook, MySpace and just about any other site where users are allowed to enter information — are actually a contract. Your responsibility is to read them, understand them, and either agree to them or not use the site. But like those long and complicated rental car contracts that very few people read or those signs at parking lots that say “This Sign Constitutes a Contract — Read It,” most of us never do.

Then there are those EULAs, which stands for “End-User License Agreement.” They’re on almost all software packages, some Web sites and some free plug-ins that we download from the Internet.

Several years ago the Web site PCPitStop.com included a clause in one of its own EULAs associated with free software that promised anyone who read it a “consideration,” including money, if they sent a note to an e-mail address listed in the EULA. Over four months, more than 3,000 people downloaded the software, but only one person followed up with an e-mail. That person was rewarded with a check for $1,000.

This experiment was conducted during the height of the spyware epidemic in which businesses were giving away free avatars, emoticons, password trackers and other software in exchange for getting user permission to put all sorts of advertisements in your face. While spyware has diminished, those days are not completely behind us.

I’m not trying to beat up on people for being in a hurry to get that software or log into the cool site, but perhaps we should pay a little more attention to what we’re “signing” with a click of a mouse.

The Facebook solution is far from perfect. It, too, has its default. And if you rush through it, you’ll wind up exposing much of your content to “everyone” rather than the more granular “friends” or “friends of friends.” And some people might not notice that Facebook has changed its privacy policy to make some information public for all its users, including name, profile picture, gender, networks you belong to, friend lists, and pages you affiliate with.

Facebook has a good argument for making this information available — it helps others find you even if you have a common name. But it takes away the user’s option of hiding this information, though you can leave some of these fields blank. Bottom line: Even with Facebook’s more transparent privacy settings and forced transition tool, users are going to have to be alert.

At the end of the day, it’s all about people thinking critically before they click or volunteer information. While I don’t suggest we all go out and hire lawyers to read every EULA and TOS put in front of us, I do think we need to slow down just a bit and put a little more thought into what we’re doing and disclosing online.

Going forward, I hope other sites take their cue from Facebook and work harder to make sure people have to put a bit of thought into their privacy and security, and what they’re giving in exchange for what they’re getting from the site.

All of the hoopla about Facebook’s controversial user policy sidesteps the point about what social Web users really need to know about protecting their privacy and intellectual property.

The latest controversy erupted last week after a blog trumpeted an otherwise largely ignored change in Facebook’s terms of service that would have granted Facebook an “irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license” to use your material and “use your name, likeness and image for any purpose, including commercial or advertising.”

Needless to say, the privacy and users’ rights community and a lot of bloggers were justifiably alarmed. The Electronic Privacy Information Center reportedly was on the verge of a federal complaint until Facebook decided to rescind the change Tuesday night.

But there was another clause in that short-lived policy that — depending on your reading — either clarifies or contradicts the rest of it. The legalese that gave Facebook perpetual rights was “subject only to your privacy settings” and those settings are hard-wired to limit exposure to your material.

Video – How to set Facebook privacy settings

The site’s privacy settings, in most cases, don’t even permit you to expose your information to everyone on the Web. By default, the settings typically show your profile and other data only to “My Networks and Friends.” While that might include a lot of people, it doesn’t include the entire world. So if Facebook is subject to its own privacy settings, it would be very limited in its right to distribute content from your page to anyone outside your network.

These settings can be modified, but most of them can only be tightened. With a few exceptions, you don’t even have the option to make a lot of your information available to the public at large. One exception is media files such as photos and videos, which, by default, can be viewed by “everyone.” But you can use privacy settings to restrict who can see your photos all the way down to specific friends or even “only me.”

The problem with Facebook’s privacy controls is that a lot of people don’t know about them, and even those who do might find them unintuitive to use. Facebook Chief Privacy Officer Chris Kelly agrees that the company has work to do in this area, and said they are developing a privacy wizard to make it a lot easier to set your controls.

In the meantime, you might want to hover your mouse over the ”Settings” tab near the upper-right corner and select Privacy Settings. There you’ll find options to control who can see your profile as well as other information about you, such as your “personal info,” status updates, photos, videos tagged of you and who your friends are. You can control who can see your profile within Facebook and you can turn off access to public search engines such as Google. There are plenty of other settings, including ones to control who can write on your wall and who can comment on notes, photos or other elements of your site.

Settings vary according to what you’re trying to control and, because of the confusing user interface, you might have to hunt around a bit. For example, to change the privacy settings on your own photo albums within the Privacy Settings area you would have to find the fine print under Photos Tagged of You that says “Edit Photo Albums Privacy Settings” or navigate from the Applications tray at the bottom left corner of your browser. That “privacy wizard” they’re working on can’t come a moment too soon.

Another relatively unknown feature is the ability to create multiple friends lists and assign different privileges to people on different lists. For example, if you want only certain people to know your cell phone number you can create a list like “good friends” and another called “colleagues” to make that information available only to people on those lists.

Be especially careful when it comes to third-party applications. For example, I use an application from Eye-Fi that automatically syncs my photos to Facebook and Flickr through my Wi-Fi network. When I review cameras, I often take ugly and stupid test pictures and, if I’m not careful, those pictures can be automatically loaded to my Facebook page for everyone to see. But my most embarrassing moment was about a year ago, when I tried out the New York Times Quiz on a day I hadn’t read the paper, only to have my low score posted for all my Facebook friends to see, including my editor at the New York Times.

Regardless of how you configure your privacy settings, there is a reality of the social Web that can’t be configured away. Any digital information that is posted can be copied, captured, cached, forwarded and reposted by anyone who has access to it. Even if some embarrassing photo or information is up for only a few minutes, there is the possibility that someone might copy it and send it around. And — as many people are painfully aware — friends can become ex-friends. So even if you’re reasonably careful about who you let on your page, you never know what they might do with the information you post.