I'm going to move this post to the JFBConnect / Joomla 1.7-2.5 forum after posting this. Just wanted to let you know so you look there, instead of the JLinked 1.7 forum you posted in.
That file should have been installed with JFBConnect when you upgraded. Can you try:
* Re-installing JFBConnect again. You don't need to uninstall first.
* Once installed, check the /components/com_jfbconnect/libraries directory for the utilities.php file. If it's not there, please check that permissions on that directory and make sure it's writeable.
If that doesn't help, let us know. Thanks,
Alex