One of the exciting new features of Gowalla 1.2 is the Facebook Connect functionality. To connect Gowalla with Facebook, do the following steps:

Click on the Friends tab on the bottom right of your passport. On the following screen, click the Find Friends button at the top:

Next, click the Facebook Friends field, and then on the following screen, the Connect with Facebook button:

Finally, enter your Facebook credentials and authorize Gowalla to connect with your Facebook account:

For your friends to show up in-app, they need to be on Facebook, using Gowalla themselves, and they also need to authorize Facebook Connect for their own accounts.

Have fun out there!