Outline of the issueThe bug allows users to work around screen locking (e.g. gnome-screensaver) by hitting Control+Alt+keypad multiply or Control+Alt+keypad divide. This terminates the input grab the screensaver has and thus allows a user to interact with the desktop, skipping the password entry.
Affected versionsAffected is anyone running X server 1.11 or later (or release candidates thereof). So if "Xorg -version" shows something else on your box, stop worrying. I doubt any distribution would have back-ported the patches.
In Fedora/Red Hat land - the only distributions affected are Fedora 16 and current Fedora Rawhide. Both have been fixed, the F16 update is avaialble here. Note that the update is to xkeyboard-config, not to the server itself.
Fedora 15 is not affected. RHEL 4, 5, 6 and thus CentOS 4, 5, 6 and other derivatives are not affected. I believe that most other distributions have now pushed out updates as well, if you want to link to the respective updates, please do so in the comments.
Sergey has also pushed out xkeyboard-config 2.5 today with the fix included.
History of the featureThe X protocol does not allow the server to break grabs. Once a client has a grab, the server must wait for that client to release the grab, terminate, or the grab window to become unviewable. This is an issue when debugging applications - if your client has a keyboard grab, you cannot use the debugger since all key events will go to the client being debugged. To avoid this issue, the X server has had two combinations to break grabs: Control+Alt+Keypad multiply and Control+Alt+Keypad divide. They forced grab termination inside the X server and although against the protocol it made debugging possible. The option required explicit enabling in the xorg.conf.
These options were removed in server 1.4 and disabled since. Which made debugging hard, so last year we merged a patch to bring them back, together with some other features. They are triggered by XKB actions (as they used to be). The plan was to remove the XKB actions from the default keymap so that the action is available on request but not enabled by default. This is where a miscommunication happened, the removal from the default keymap never happened. So server 1.11 and vanilla xkeyboard-config ship with both the actions available and present in the current keymap. As a result, any user can break a grab from any application and thus get around screen locking.
Outline of the fixTo shoot yourself in the foot, you need two items: a gun and a trigger. We have removed the trigger. The fix we've now pushed into xkeyboard-config removes the actions from the default keymap and into an XKB option instead. So the fix does not remove the gun, but it requires the user to screw the trigger in themselves before trying to hurt themselves. In a default configuration, it is thus no longer possible to break the grab of your screensaver.
To re-enable grab debugging, run setxkbmap with "-option grab:break_actions" or enable "Allow breaking grabs with keyboard actions (warning: security risk)" in the "Miscellaneous compatibility options" in your keyboard layout configuration tool of choice.