I'm currently running the .2 RUU and with the last update from Facebook, haven't run into the "Fail Authorization" issue....
I did have this issue quite often before, but just uninstalled the updates and all was good.
As for contact images.... Facebook is currently blocking these to 3rd party app's... Until that changes, you will have to use a work-around that you can find already posted...
Color Me RED !..... I'm OFFICIALLY a HTC REZOUND!
Running: Leaked ICS 4.03.605.2 - S-On and Unrooted!
BB 6510>7510>8830>8330 Curve>9530 Storm> HTC Droid Incredible
> HTC REZOUND!