Microsoft on Tuesday released a security update, MS08-068, which addresses an NT LAN Manager reflection vulnerability in the Server Message Block protocol. The exploit was discovered in 2000, and the code was first published back in March of 2001.
That means that a known security vulnerability related to a Microsoft authentication protocol sat on your Windows box for more than seven years, waiting for Microsoft to get around to fixing it:
This vulnerability allows an attacker to redirect an incoming SMB connection back to the machine it came from and then access the victim machine using the victim's own credentials. (Hence the term "credential reflection").
In typical Windows XP configurations, where SMB sharing is enabled, and the user is a member of the Administrators group, this allows the attacker to easily take over the machine. Public tools, including a Metasploit module, are available to perform this attack.
You can read the full story on PC World's site.