I've been having the same problems. A few hours ago I tried the following and it seems to have worked, except it's still slow to update everyone's pics:
1. Uninstalled Facebook (I had done the update from the Market, so this reverted it back to the original version)
2. Removed my Facebook for HTC Sense information
3. Deleted Facebook for Android and HTC Sense apps from my actual Facebook profile
4. Turned off the phone, removed the battery and let it sit for a few minutes, just for good measure
5. When I rebooted, I added the plain Facebook account first, then Facebook for HTC Sense
6. I started syncing, and it seemed to be having the same problems, so...
7. I went to someone who had managed to sync already (in the A's) and I went through the process of linking to a FB account. I left it on the screen where you choose from your FB contacts, and slowly but surely it continued to sync and add people. Sometimes it would look like it was stalling, so I'd back up a screen, then go back to find the FB contact and just let it load. After about an hour, it finally made it all the way through my 1300 friends and down to the Z's.
I have no freaking clue why it had so many problems. but at least now people are linked, and hopefully over the next few hours it will add more pics in. I find that if I go back to that FB screen and let it sit, it starts to fill in more pics - I hate to see what will happen if I add friends or they all start changing their photos...