Facebook Announces FBJS2
developers.facebook.com
developers.facebook.com
It seems better to just run your whole app in an iframe and just use html/css/jquery and have complete control while hitting the REST api yourself.
http://www.ccheever.com/blog/?p=10
FBML allows you to do specific Facebook-only features easily, like friend requests and searching for your friends. It also has documentation and tutorials, which is not trivial when making the FBML/iframe decision.
In general, its pretty useful to be able to sandbox JS on a page so you can allow 3rd parties to do scripting on your page without putting their stuff inside iframes.