If you're using 3.0.x, it's possible this isn't an issue. We've updated that check in 3.1 to be more accurate and reflect some new settings that Facebook offers.
Basically, if JFBConnect works (you can log in on the front-end), you're probably good to go. Do check though, that if your site is xyz.com, that if you go
www.xyz.com, it works as well. That's the main thing we try to check for, as not everyone realizes that on the web,
www.xyz.com and xyz.com are 2 different sites according to Facebook.
To check your settings, if your site is
www.xyz.com, you'd want the following settings in the Facebook Application:
Site URL:
www.xyz.com/
Base URL: xyz.com/
Hope that helps, but if you still have questions, let us know!