At first I thought this was my app but I get the exact same problem when using any of the FB sample apps.
Take the HelloFacebookSample for example, which gives you a login button and after login shows you your pic and enables you to post status updates.
If I don't have the FB app installed on my phone the login button gives me a web view which i login through and the photo appears in the app and i can make posts. However if the FB app is installed on my phone it brings up a dialog saying the app would like to access you public profile etc. I press OK and..... nothing.
I have found many questions that seem similar but the problem was usually using a debug key as opposed to a release key, but I am running from eclipse so the debug key is still appropriate.
Any ideas?