The SANS ISC (Internet Storm Center) is describing the issue as a "major zero day bug" that should be immediately mitigated by disabling telnet in Solaris 10/11.
SANS ISC handler Donald Smith explains:
The telnet daemon passes switches directly to the login process which looks for a switch that allows root to login to any account without a password. If your telnet daemon is running as root it allows unauthenticated remote logins.
David Maynor, chief technical officer at Errata Security, warns that the issue is trivial to exploit. "It doesn’t require any skill, any exploit knowledge, and can be scripted for mass attacks."
"This combined with a reliable local privilege escalation exploit would be devastating. Expect mass scanning and possibly the widespread exploitation of this vulnerability," Maynor added.