There's an interesting discussion of employers banning facebook at work at Workplace Law, a British resource. Basically, employers can ban just about any sort of use of the computer use that's not strictly work related, such as access to social networking sites like facebook, myspace, or friendster, as well as non-work email, such as hotmail, yahoo, or gmail.
Workplace Law points out that by banning sites an employer risks angering employees, which can be counterproductive:
Law firm Allen & Overy recently had to repeal their ban on Facebook after their IT department was bombarded with complaints from staff members. Staff at the firm are now allowed to go onto the site as long as they do not view videos, which may compromise the performance of Allen & Overy’s IT systems.