Using social media on projects can be a valuable asset, if done correctly. Many projects today are distributed in some form. Think of distributors/vendors/subs/partners, project members, stakeholders, end users, functional managers, political personnel and the list goes on. Not all these individuals are part of the project team working under the same office space and within talking distance. How do you communicate with them? Yes, the communication plan deals with formal and informal communication but there is still the "water cooler" aspect to communication; and the "gotta talk now" dilemma that project managers face, especially on high profile, distributed projects.
The water cooler is an interesting phenomenon. For those of us still working in a traditional office we see our co-workers in the hall or at the coffee machine (water cooler) and we can chat about particular problems. Engineers at AT&T and other R&D facilities have been known to solve complex issues over "water cooler" chats. Or at least start the resolution during these chats. In our distributed environments we don't have these chance encounters or even the opportunity to get up from our desk and go see our colleague who is great at helping to walk individuals through complex issues.
The water cooler can be created in the distributed environment. For the water cooler to be effective there must be trust because the water cooler is also an environment where people like to discuss management. I have established several virtual water coolers. Some were formalized with the company. This meant senior management, including the project manager, formally agreed not to be a part of the water cooler. Those that participated agreed to abide by the company's human resource policies. That meant should anyone participating complain about content or a person's behavior, a person from human resources would investigate. Only the one incident in question would be investigated.
There are many tools that can be used to establish water coolers. Some are more secure than others. Just make sure that whatever is selected, it is easy to use, groups can congregate quickly, webcams are an option, and if possible, whiteboards and documents can be shared real time over the same tool.