Social CRM and Social Recruiting are incredible tools for finding candidates and sales prospects. The amount of data online is so vast, a skilled researcher can find information that is helpful in just about any business capacity.
But what is the line on that?
On the coasts, the personal and the professional often blend. 20-somethings utilize Facebook, Twitter, and Foursquare services to connect with each other and do business, and the line between their social lives and their office lives is often blurred. That's not quite the case everywhere, but if you're searching for information on a candidate, you're going to run into their personal information, including photos, comments, and their connections.
A smart researcher ignores most of this, skimming past irrelevant information like ads on a page, but there are many recruiters who enjoy the voyeresque power of looking into people's lives. I know this because some of them admit it.
There are rules, of course. Government rules and corporate rules that are supposed to screen out the bad practices, but those are more about lawsuits than what is right or wrong. You can't legislate right or wrong.
In all cases, the best advice is to use your head. If you're a manager, hire people with maturity (don't be fooled by their age), and provide oversight (not micromanagement). We're on the cusp of seeing a lot of lawsuits and news stories about the danger of social recruiting, as the poor economy tends to lead to more people frustrated with the hiring process.
Just keep your wits about you and don't feed the monster. The benefits outweigh the risks if you have the right employees. If you have the wrong ones, no rules will matter.