The people hub is really good and the integration of Facebook and twitter is just great. The hub is so good that its restraining me from installing the dedicated Facebook app. But since both exists in the app market and both developed by Microsoft, there might be some functionalities left out in the people hub for Facebook. Please help me pin out the functionalities that Facebook app has at offer and people hub doesn't.
I prefer the Facebook app over the people hub for day to day FB interaction. People hub only notifies you of alerts on your wall or from people you mark as close friends. The Facebook app lets you see your full feed. Also, you can't like an individual comment on the People Hub. Finally, it let's you browse your friends profiles and brings more of the features of the full website.
There are some things you can't do on the app that the website allows like changing your profile picture and cover picture.
In addition to the other answer[s], you can't read private messages with WP7 either.