Brian Suda has an article on Dev.Opera about XFN - XFN encoding, extraction, and visualizations. It's a great place to start reading about XFN:
XFN stands for XHTML Friends Network[...]. It grew out of the common publishing trend of linking to other sites you enjoyed reading. On your blog, this is called a blogroll - it is common to think of people by their web sites. Their URL is a representation of that person; part of their online identity. XFN is an attempt to codify these relationships using standard HTML.
I was going to nitpick about Brian's point about tool support for XFN, but I shall get into that in upcoming posts about the social graph.