Organizations all face tough issues with social networking, mostly involving inappropriate material becoming public but entities where authority is critical to the organizations mission; police, schools, government agencies and the like, are even more vulnerable to the viral danger of social networking. Schools in particular face difficult issues both from the student end – their facility at social networking and the damage that it can do to peer relationships and from teachers whose authority can be undermined by the salacious photos, discussions of drug use of drunkenness if these things become common knowledge.
Here is an article that addresses some of the legal issues school district face in this regard.