With so many websites to join, users must decide where to invest significant time in adding their same connections over and over. For developers, this means it is difficult to build successful web applications that hinge upon a critical mass of users for content and interaction. With the Social Graph API, developers can now utilize public connections their users have already created in other web services. It makes information about public connections between people easily available and useful.
Here is an introductory video from Google about the Social Graph API which is useful background stuff:
The idea of a lifestream (aka the Social Graph although I still don’t like that term) appeals to me as a model for a social web application and this API is obviously an important part of that.