I can see how and why some people begin to feel 'down' or 'envious' about peoples status' on such sites as Facebook etc but for me personally I feel that probably 90% of people's status' are written for the very same reason BY these people.
Not everyone is happy and content at the happenings in their lives and they wish it could be more exciting etc but I can also assure you that a majority of the postings are indeed fictional to help the author feel better about their lives as well.
This doesn't make it a bad thing just a little bit transparent, if people are down about their situation in some way, this is a good avenue for them to vent their frustration and get feedback from their 'friends' via a social networking site without it sounding to needy.
I myself take everything on such sites with a huge pinch of salt, because as you rightly point out it can have a negative and damaging effect if you let it......so don't
Your 'real' friends should always be there and you all know what the deal is, this is why they are classed as your 'real' friends, not just people you went to school with, and never liked but accepted their friend request on Facebook