There has been a lot of buzz about this; some of it is panic and others are downplaying the whole thing. What does it really mean for you?
Facebook is describing Timeline as the story of your life. In some ways it looks like a resume - cover photo, biographical info and chronological posts and pictures. If you've been on Facebook for awhile and have posted some questionable/stupid stuff it will come back to haunt you now. The good news is that you can clean it up. The bad news is that it appears to be a tedious process. See the PC World link below for a description of how to make sure Timeline doesn't showcase bad decisions you've made in the past: