Egads. Hopefully there will be better global controls soon.
So to fix your stream.
Since you are probably missing people from your stream and don't even know it, the best way to fix your stream is to go to the new subscriptions menu. You will also see the people who are posting publicly to the web and will have the option of turning this feature on for your posts. At this time you can't really control whether you see Top Stories or Recent Stories first -- from what I'm reading Facebook is choosing that based upon how often you login (for some tips on managing this annoyance, check out this post).
Under Favorites>News Stream click on the pencil icon to the left.
Click on Edit.
Click on Manage Subscriptions.
Click on each person's Subscribe button.
Change Most Updates to All Updates if you want to see everything. Each and everyone person you've subscribed to (well, if you want to see all of their updates and if you don't, change it to be what YOU want it to be). You can change these through the stream, too, but if you are not seeing people, then you're not going to see them in your stream to change their status.
Clicking on Recent Updates will change that to the default view in your stream - vs. Top Stories (or choose a list to see - you may have to make a new one). The option to all see news feed by ALL friends > went away. (good riddance!) If you're like me and you haven't tagged your family (because you don't want to give facebook even more demographic data) and you haven't put in your birthplace or hometown or high school (ditto), then facebook was unable to construct a family and close friends list (my lists are empty.) So, I guess I am lucky facebook didn't kick me out for not playing by their rules. ;-)
The good, the bad, the ugly...
If your settings are public, Facebook has now made it transparent that the information is being published to the web. In a way, that is a good thing, anyone can easily subscribe to your Facebook feed. So, check those privacy settings carefully. Another thing Facebook is doing is allowing you to SUBSCRIBE to anyone with a public account without friending or liking (heh!) them (sort of like what you do with a youtube channel or twitter...) if they turn on "allow subscribers" - this is called a public subscription. (Actually, everything in Facebook is API based - think RSS feed- so it is essentially subscribable if the privacy setting allows it...) You can offer this service yourself or if you don't want to publish out to the web or allow people who aren't your friends to subscribe to you, doublecheck that this setting is off.
Here is that info in pix.
What is a little strange is that you can't subscribe to people even if they use the subscribe button if there other settings override it - in other words, their wall is public, they have a subscribe button, but limit subscriptions to friends of friends. Of course, you could always just use the RSS for any public account anyhow...
Please check my facebook posts for the latest news.