Remember the HTC Chacha (AKA HTC Status sold by AT&T) or the HTC Salsa? Both were supposed to be Facebook phones that were unveiled as the Mobile World Congress in 2001 back in February and both were a complete bust.
According to All Things Digital Facebook is still entertaining the thought of a Facebook phone and this time the new phone has been dubbed ‘Buffy”, after the television vampire slayer, the phone is planned to run on a modified version of Android that Facebook as tweaked heavily (scary thought) to deeply integrate its services. 
Facebook once again has chosen HTC to manufacture the Facebook phone after also considering Samsung. While the idea may sound “cool” to have a Facbook phone I really don’t see the practically of it. I like most readers here do have a Facebook account and I probably spend more time than I should on Facebook but I really don’t see the need to have a phone designed specifically for just Facebook. When I am out-in-about other than checking-in, I rarely open the application on my phone.
If the reports from All Things Digital are correct, Facebook may follow Amazon.com’s path in creating its own highly customized version of Android to power the phone. The problem with this strategy is, you lose access to core services of such as the Android Market and Gmail. This may be a moot issue to Facebook who probably consider running its own messaging and e-mail services on the device.
Again, going back to my previous statement, the idea may sound “cool” to have a Facebook powered phone but the practicality of it is not there. I have used HTC’s and Samsung’s integrated Facebook applications that sync my whole address book with Facebook and the outcome is always a huge address book filled with a bunch of people whom I maintain little to no contact with.
The Smartphone business is a very competitive business and with this idea still in development stages meaning we would not see an actual Facebook phone for at least another 12 to 18 months which would allow Google, Apple and Microsoft to leap way ahead in innovations leaving Facebook in the dust. If I were Facebook I would file this idea away and work on better Facebook applications for our devices.