Its experienced professionals with a largish group of colleagues. I can find nearly everyone I've ever worked with in there. And none of my nieces/nephews/kids friends.
OTOH, if Facebook chose to, they could really hurt LinkedIn by leveraging their existing network. Just expand the jobs part of the profile to support resumes and such, add support for job relationships similar to family relationships, and provide default privacy settings for "colleagues" rather than "friends". Sell access to a back-end search limited to the jobs section, and LinkedIn starts running scared.
The line between professional and personal life will shift, and this may be a generational thing. But who knows, the distinction may sharpen rather than blur. One of the big reasons I haven't left a huge web/video trail of my own stupidity on the web is that I'm old enough that the web was still an infant when I was in college, and nobody had cell phones with video cameras and recorders. Now, anything even slightly unusual on a college campus will be recorded by at least a half dozen people.
You could figure that people will blend social and professional lives as they they get more casual about these artifacts. But maybe they'll just learn to draw very fine and deliberate distinctions - kind of the difference between getting excessively drunk at a work event and getting blotto at a bar where your colleagues just happened to show up later in the evening.
Anyway, I went a little off topic there, but maybe there's a long term niche for social/professional networks that are explicity not social/casual.
I know a lot of people have on Facebook have accepted invites from their boss or professional contacts and they stop participating in it as a social network and start using it as a glorified email/im system. If everyone did this, it would harm Facebook's ecosystem in the long run.
Even with privacy controls and grouping people together, keeping mental context about who can see what at any given time is just too hard for most people. Seeing facebook.com and thinking social and linkedin.com and thinking professional is far easier.
* Disclaimer - I used to work for LinkedIn in analytics as a product manager and did a lot of user interviews, but I may have drank the kool-aid.