Facebook and Instagram will be able to share data, photos, names, likes, etc. with themselves but also with "affiliates," which can include third-party companies.
The big change, that has everyone bothered though, concerns Instagram's ability to use your name, photos and other data in a commercial fashion, i.e. sell your photos to advertisers.
As is usually the case with these documents, the wording is vague enough to mean quite a lot of things, including Instagram effectively using your "creations" as stock photos to be sold to anyone who wants to pay.
It's unlikely that this is what Instagram had in mind, more likely this is something like promoted stories on Facebook. The site can use your likes or posts in ads for the pages or companies you liked or talked about. Instagram could do something similar.
However, while Instagram may not want to sell your photos to anyone who wants to pay, the document says that it pretty much can. And there's nothing you can do about it except delete your Instagram account before January 16th, when the new documents become binding.
What's more, it seems that after that date, deleting your account won't guarantee that Instagram won't use your photos anymore.
Facebook's terms of service aren't as vague and Google+ specifically says that it won't use your photos other than to display them as part of the service, i.e. show them to the people you shared the photos with.
Instagram does state that your photos remain yours, i.e. you keep the copyright, but you also issue a wide license to Instagram which means that, even though you own them, the site can do with the photos as it pleases.
Instagram should come out and explain exactly what it plans to do rather than rely on the legalese. That said, there is a point to be made about the "value" of Instagram photos. Most of the pics shared there are throwaway, nobody even remembers them the day after. That's not true for all the photos, but it's true for most.