Makes sense so far. Here's the install screen where you agree to let the application loose on your profile:
Once done, you see the following screen and this is where it all starts to go a bit wrong:
Note that the application is ALREADY installed by this point, because the Gridview icon is on your list of current applications (highlighted by the red box on the left).
However, top right (also highlighted) is a box made to look like a standard Facebook "continue" button. When installing the application for the first time, this caught me out too - I didn't notice the app was already installed and (naturally enough) clicked the "continue" button, thinking there was something else I needed to do to complete the installation.
Imagine my confusion, then, when I was suddenly presented with this:
Click to Enlarge
A page asking me to download "Mothers Day E-cards", via IAC (creators of Smiley Central, amongst other things). By this point, you've left the Facebook network completely and are sitting on a page served up by an advertising network - go back to the Facebook screenshot above and check out the URL at the bottom of the browser. That's the actual destination of the "Continue" button.
That's a pretty sneaky tactic, if you ask me.
What needs to be established is, who is responsible for the placement of the fake "Continue" button? Is it the creator of the application, or is it legitimate advertising space on Facebook being subverted in a rather creative fashion by an advertising agency promoting IAC products?
I've tried reinstalling the application a few times, and the graphic displayed sometimes changes to more overt "this is an advert" style banners leading to other sites offering similar downloads / offers. Other applications installed don't seem to display sneaky adverts like that in the same location, but every application install is somewhat different so that's not really a conclusive answer.
At any rate, be wary of what you click on when installing Facebook applications...