I’ve been using WordPress for a while now, and this is the first time I’ve heard of a critical WordPress exploit… I just upgraded to 2.1.2 and I recommend you read the articles below and upgrade immediately!
Long story short: If you downloaded WordPress 2.1.1 within the past 3-4 days, your files may include a security exploit that was added by a cracker, and you should upgrade all of your files to 2.1.2 immediately.