The Activity Feed features are best described by Facebook as:
"The Activity Feed plugin displays the most interesting recent activity taking place on your site. Since the content is hosted by Facebook, the plugin can display personalized content whether or not the user has logged into your site. The activity feed displays stories when users interact with content on your site, such as like, watch, read, play or any custom action. Activity is also displayed when users share content from your site in Facebook or if they comment on a page on your site in the Comments box. If a user is logged into Facebook, the plugin will be personalized to highlight content from their friends. If the user is logged out, the activity feed will show recommendations from across your site, and give the user the option to log in to Facebook."
For the Domain, enter your domain only, no http:// or path. Actions are a comma-separated list of the actions for which to show activities. Recommendations indicates whether or not recommendations are shown in the bottom half of the activity feed display. The Filter parameter lets you filter what pages are the source for activity feed data. The Ref parameter is used to add tracking references and the Max Age parameter allows you to specfiy the maximum number of days old for activity to be displayed.
See Facebook at http://developers.facebook.com/docs/reference/plugins/activity/ for more detailed information.