Hi, I Have the same issue..
I think the issue maybe that in an effort to prevent spammers, facebook are not allowing new accounts or accounts with few friends to use fb connect to sign in.. i think this needs some investigating because the account i am using to test facebook login is not my true fb account.
THAT SEEMS TO BE THE ISSUE.
Just changed my admin email address as it was the same as my facebook account and i managed to sign in using Facebook Connect..