Facebook Photos, now with facial recognition auto-tagging
Now, when you upload photos, Facebook will compare the faces in the photos with the faces of your friends. If a match is found, you'll be prompted with a suggested tag. If Facebook can't identify a person, it will ask you to enter their name, which will presumably help with identification in the future. If you upload a batch of photos of the same person -- say, from a wedding or birthday party -- Facebook will group those photos together and suggest a tag, making tagging a one- or two-click affair.
With a shocking grasp of foresight, Facebook is going to let you opt out of the auto-tagging process, too! If you don't want your face to be recognized in other people's uploads, hop over to Privacy Settings > Customize Settings, and deselect "Suggest photos of me to friends." [This option doesn't seem to be visible yet, but that could be because I'm in the UK -- or because the roll-out hasn't begun.]
There's no mention of whether you'll be able to auto-tag old photo albums, but I suspect it will be possible.