Do sororities look at your Facebook page? Yes.
Do they continue to look at it? Yes - some have created a new office for electronic communications. Part of the job is to creep Facebook and send emails to ladies who have pictures that may not be considered appropriate. Anything that you would not show your grandmother, anything that you would not use for a slide show during recruitment, may get an email. Anything really bad may get you called in to discuss your choices.
Its all about what image to you want to project. There is a line between fun and trashy. You do not know who will be looking at your Facebook. Employers look at Facebook. Graduate school admissions committees look at Facebook.
The same company that owns Fox News owns MySpace. Read the fine print = anything that you put on MySpace can be used by Fox News.
Athletes on my campus get a 2 hour presentation about how what they have on their Facebook page reflects them, their club, and their university. This might be good for any freshmen out there.
You need to think about what image you are presenting for yourself. Who do you want the world to see? What you put out there can be hard to get rid of. Do you really want that picture from freshman year of you being goofy come up when you apply to law school? Google the beauty queens that have had their crowns called into question because of goofy pictures of them on Facebook or the school teachers who were suspended for pictures of them drinking on Facebook.
Anything listed as "private" is merely not easily accessible. I know of students that have recently done an internships in DC who were confronted with inappropriate pictures they thought were private that were found on background checks.
You don't necessarily want to show the world everything about you. Save us a little mystery so we want to get to know you. Its just not safe to let any random stranger know TOO much about you.