An attacker could exploit the bug by creating an overly-long "news://" link, distributed in an e-mail or on a Web page, and enticing a user to click on it. Such methods have been successfully used to spread worms. Mozilla version 1.7.5 fixes the problem. Independent security research firm Secunia gave the bug a "highly critical" rating.
Firefox and Thunderbird are affected by less serious problems. The first is a vulnerability in the way they store temporary files--the files are sometimes stored with predictable names and in a format that allows anyone to read them. This means a local attacker could easily read the contents of another user's attachments or downloads, according to researchers.
Finally, a Secunia researcher discovered a way of spoofing the names of file downloads in Firefox. A malicious site could use the bug to disguise the true nature of files the user is downloading, or to get information on the presence of specific files on the local system.
These bugs are all fixed in Firefox 1.0 and newer, as well as Thunderbird 0.9 and newer.
Meanwhile, the same company reports existing security flaws in IE. Not all of the 5 Firefox vulnerabilities have been corrected, but I'll take those 5 minor issues over the 75 existing IE 6 vulnerabilities dating back to March 13, 2003.