I've been 'playing' Foursquare on and off for about six months now so it's interesting to see it now gaining much more visibility among the people I see on Facebook and Twitter. Since Beijing support was only added a couple of months ago it's still like the Wild West here with few mayors and much opportunity to stake claims and that's continued to keep me engaged.
Meanwhile, in a recent post, Dare Obasanjo talks about applying being more cautious with accepting friend requests due to the real world privacy implications. That got me thinking about the overall growth potential of the multiple player already here (Gowalla, Foursquare, Loopt and others) and whether Metcalfe's law plays the same role here as in other social networks. With an increased sensitivity to privacy, perhaps it's sufficient to just be a part of the network of people I'm likely to have some reason to share my location with rather than the network that contains everyone. That could set up for an equilibrium with multiple services rather than an inevitable winner-takes-all situation. As a result, it could look similar to the fragmentation of social networking sites across country boundaries (e.g. where different networks are popular in different regions) except at a smaller scale such as city, social group or a combination of the two.
Overall though I have a hard time believing that there's room for parallel set of location-based social networks against the backdrop of well-established social networks. A well-designed and neatly-integrated feature in Facebook (for example) with sufficient controls to declare which subset of friends can see your location seems likely to dominate by momentum alone.