As Facebook describes it:
With timeline, now you have a home for all the great stories you've already shared. They don't just vanish as you add new stuff.
Timeline is wider than your old profile, and it's a lot more visual. The first thing you'll notice is the giant photo right at the top. This is your cover, and it's completely up to you which of your photos you put here. As you scroll down past your cover, you'll see your posts, photos and life events as they happened in time. You choose what's featured on your timeline. You can star your favorites to double their size or hide things altogether.
Here is a video demo of how it works:
Greg Finn does a good job summarizing many of the features at Search Engine Land.
A WebmasterWorld thread has people saying this is all a bit "creepy", other's saying "too much change too soon," but others are finding it pretty cool.
I am not sure, I rarely put personal stuff on Facebook, so I am not sure how this would apply to me yet.
Forum discussion at WebmasterWorld.