Firstly, Facebook is supposed to provide information about you. There's little point to providing information that is patently false. Why even waste the keystrokes? If you don't want a piece of information known, just omit it. Thus, people generally expect the information you provided is true.

Secondly, I think we were all a lot more fanciful when we were kids.

I thought it was supposed to help me stay in touch with people and stuff, like they claim on their homepage. I'm adding false information related to my location to confuse their nosey advertising probe.

I'm not really a FB fan or anything, but the idea is you stay in touch in part by providing that information about your life. Getting snippets of friend's ongoing lives helps sustain (or maybe just slow the decay of) rapport, even in their physical absence. If it was just a platform that allowed you to message your friends, it would be no different from an email list.

WHY? This is consistently one of the biggest complaints about Facebook. I can understand people who've had Facebook since it's early days having this problem but if you just opened your account why did you add people you don't know?

Edit: just to make sure I get my message across the way I want to: I do this because I'm somewhat uncomfortable with the idea, but more importantly because:

a) I hate targeted advertising. If I make a purchase decision, I want to make sure I make it based on actual information, not clever advertising. Avoiding clever advertising is a good way for me not to bump into it.

b) I really think this is wrong. I am a programmer myself, and I think platforms like Facebook are definitely not the way technology should be used. Of course, not all of my friends share the same principles, and I don't want that to be an obstacle; I found this to be a reasonable middle ground.

Nah, you just get adverts you care even less about than those which have a chance of being some measurable fraction of relevant.

Most of the adverts I see seem to be based on what my contacts have "like"d, or otherwise interacted with, more than what I have done (though this could be in part due to me providing fb with a lot less info to work on than some of my contacts do) so providing fake information about yourself will make little difference there unless your contacts all do the same.

I honestly don't care about targeted advertising. Irrelevant advertising works fine for me.

I hate Facebook's privacy policy (or lack of thereof)

If you only add real friends, there's too much signal and not enough noise to cover it up. This is in line with using tor and using fake locations that change frequently.

I only stay in touch with people I want to stay in touch with. There are no ex-colleagues-from-that-job-i-left-four-years-ago-whom-i-met-at-that-concert-an-year-ago-but-can't-quite-remember-their-name. Close friends with whom I really do have links to share and things to chat about.