How to access the new feature:

You can accessFind Friends Nearby either through the iOS or AndroidFacebook apps just open up the mainmenu, tap “Apps,” select “Find Friends,” press “Other Tools,” and then pick “Find Friends Nearby” or byheading to your mobile device.
People are worried this violates privacy. However, people can only see you when you are on this page, and it’s obviously not easy to find. It reminds me of instructions for how to install a program in Windows 98.

Update: Facebook has pulled this feature already.