"He has, however, plunged into a quixotic and surprisingly adept legal effort to challenge the company's registered trademark. In addition, he's using the experience of publicly criticizing Facebook to inform his own startup."
Regardless of whether or not the "he stole my idea" story is real, I do think that he may have a good case that "Facebook" isn't trademarkable. When I arrived at college the year before Facebook the site launched, we received a dead-tree book at orientation that was called a "Facebook", and they had been a tradition there and at many other schools for a while. While Apple can trademark their logo, they can't trademark the word "Apple".
Ah, except they can trademark the word "Apple" in reference to the sales of computers. A trademark is not just a word, but a word paired with a market.
As I recall from some marketing class or other - to use a concrete word like Apple, it can't be indicative of the product's function. So the use of the name Apple for a computer company doesn't in any way restrict other companies from entering that market. But naming something after the offline function that it implements - that does affect other companies trying to enter that market.
I.e. if instead of Apple they'd chosen PC Computers - it likely would not have been a valid trademark. And if you were an apple producer and tried to call yourself Apple Inc., sorry that's no good either.
At my college we had "Faces and Places" a.k.a the "Meet Book" otherwise known as the "Meat Book." I don't remember it specifically called the "Face Book" but I don't think it's a stretch to think that kids at many other schools would have called it that.
I think YC has the answer to the third question. Don't take VC money - or at least delay it as long as possible. The more money and the further you get away from founding, the less your contribution is really worth, unless your role expands with the company - and that's often difficult once the VC's management team arrives.
I don't know if he's for real, but he seems persistent and intelligent, typical traits for a founder. Zuckerberg doesn't really seem all that smart.
"He has, however, plunged into a quixotic and surprisingly adept legal effort to challenge the company's registered trademark. In addition, he's using the experience of publicly criticizing Facebook to inform his own startup."