This is singly the most important piece of iPhone news yet. It may even eclipse the announcement of the device itself... From the Computerworld article, the exploit gains root access. Imagine a 21 million phone bot-net created overnight, with the ability to geo-locate each unit and receive audio and video from it. Remember that most PC exploits can be prevented via a firewall, and this cannot. Most PC's are also behind a router and not directly addressable, while phones (via SMS) are not.

How do I stop AT&T from delivering text messages? There's no way to turn them off at the OS level...

EDIT: You can disable text messages by signing up for Smart Limits for Wireless Parental Controls ($5/month). You can then add whitelist numbers and set the SMS quota for greylist numbers to 0.