I hear this advice a lot and I've implemented FB Connect on dozens of sites. But I have yet to see hard data that FB Connect increases signups. I'm not convinced that this is the best use of effort for early startups.
Do an A/B test... and definitely let me/us know what the results are, if you decide to do that. Hard data on this issue would be good for the whole community to have!
good discussion to have... Actually when we started Pickemfirst, we used Google accounts for authentication. This became a problem because we needed specific settings on our cookies so that they are available to third party sites. Plus people complained it was too difficult to create a Google Account. Might be different with FB connect though...