Netflix just formally announced Facebook integration at the Facebook F8 conference, and posted an announcement on the Netflix blog.
As soon as the feature is enabled, you will see an option in the Netflix user interface to connect to Facebook. After connecting your Netflix account to Facebook, you will see what your friends are watching on any device that streams from Netflix, provided your friends are also connected.
Note that nothing will be shared unless you choose to connect your account to Facebook and sharing can be turned off at any time.
Facebook integration will be availabel outside of the U.S., but is delayed here due to the Video Privacy Protection Act, which should be changed by the hopeful passage of HR271. Netflix and Blockbuster are both in the middle of lawsuits over the VPPA, so Netflix is wise to wait.