No, what it does is reads the photos you've used iPhoto to upload to Facebook/Flickr and modifies the original copies. What I saw was that the Facebook albums on the left navigation bar where MobileMe was are no longer there, but instead the pictures are in their original events/albums and have been renamed to reflect whatever description was input on Facebook. I don't like this at all and already submitted feedback to Apple, but I'm fully aware the chances of anything happening is slim to none.
If you didn't use iPhoto to upload the photos, you shouldn't see any changes. If you did, then be prepared for frustration. The way they implemented this is ridiculous in my opinion.