Core Security, which found the vulnerability, described it this way in a statement it issued this morning:
Engineers from CoreLabs, the research arm of Core Security, determined that Adobe Reader could be exploited to gain access to vulnerable systems via the use of a specially crafted PDF file with malicious JavaScript content.
Core Securities explained that the flaw existed because of the way vulnerable versions of Adobe Reader implement the JavaScript util.printf() function. It seems that function converts the input it gets into a String, but only the first 16 digits of the input is used, and the rest is filled with "0" as filler. Unfortunately, if an unexpectedly long value is fed to the function (and it's crafted the right way) memory will be overwritten and the attacker can gain control of the application's execution. This is a normal buffer overflow.
Developers need to do a better job checking how applications handle inputs, and these types of problems can be avoided.
All of that is the bad news. The good news is that Core Security worked with Adobe and didn't announce the existence of this flaw until it was fixed.
Your options are to update your current version of Adobe Reader 8.1.2 or earlier, or disable JavaScript in that applications Edit/Preferences menu.
Core Security has published an advisory that probably gives you more information about the flaw than you'll need to know.