I think that an open, distributed social networking protocol is a game changer. If there exists the ability to move between social networks while maintaining your social graph, that makes the way that social networks rise and fall very different than when sites hold your social graph hostage if you try to leave.
http://developer.appleseedproject.org/profile/michael.chisar...
Keep in mind, this is beta software in active development, so you'll notice a few bugs here and there (and the live server is missing a major update I'm running locally).
So to start with a simple one: how does one add somebody else? Can you just search by name? I'm just having a bit of difficulty imagining how that sort of thing would work well in a truly distributed, federated way. But I haven't done much thought on it so I'm interested to hear.
Searching is being worked on, that's coming in the next update, but yes, you just search by name (or other attributes). Distributed search is difficult, but only on the backend, on the frontend, it's similar to what you're used to. Only caveat is that it is not exactly real-time, and is more like a P2P search than a google search.
Once you find someone you're looking for, you identify yourself to their site by remotely logging in. This is as simple as giving your ID, which looks like an email address (username@domain). Then you click "Add as friend", and they're sent a friend request. When they approve it, you are mutual friends.
You can post stuff to your "page" (what appleseed calls your wall), and an update will be sent to your friends list. You upload a photo, and an update shows up in your friends lists newsfeeds. They click on the thumbnail and it takes them to your photo album on your home node, etc.
Some other distributed social networking sites are breaking from convention in a lot of ways, but Appleseed's goal is to try and make it work as much like the current systems people are used to as possible. Certain growing pains are inevitable, but so far it's pretty similar after the first couple minutes.
Facebook Connect accomplishes most of what you want here. At least, it could.