People will still have to use their real names in Germany, as a court rejected a request by privacy regulators to force Facebook to allow pseudonymous use of the site. German privacy laws prevent sites from forcing their users to provide real names.However, the court said that because Facebook has its European headquarters in Ireland, it doesn't have to abide by German privacy laws.
It's only a temporary reprieve, most likely, the privacy regulator is already appealing the decision and it's likely that a higher court won't side with Facebook on this one.
In essence, the decision would make it easier for companies doing business in Germany but headquartered somewhere else to ignore German law.
For now, Facebook is pleased with the verdict, but there are bigger battles ahead of it. The German data protection body that sued Facebook doesn't intend (in German) to give up any time soon.