The browser flaw, which is currently unpatched, expose Windows users to remote code execution attacks with little or no user action (drive-by downloads if an IE users simply surfs to a rigged site).
Microsoft's advisory speaks of "active attacks" and follows a separate note from Google that references the IE flaw "being actively exploited in the wild for targeted attacks."
A source close to these investigations confirm that these attacks prompted Google's recent decision to warn GMail users about "state-sponsored attackers."
On Twitter (see image), several users have publicly reported seeing the message atop their GMail inboxes.
Microsoft's explanation of the issue:
The vulnerability could allow remote code execution if a user views a specially crafted webpage using Internet Explorer. An attacker would have no way to force users to visit such a website. Instead, an attacker would have to convince users to visit the website, typically by getting them to click a link in an email message or Instant Messenger message that takes them to the attacker's website. The vulnerability affects all supported releases of Microsoft Windows, and all supported editions of Microsoft Office 2003 and Microsoft Office 2007.
The vulnerability exists when MSXML attempts to access an object in memory that has not been initialized, which may corrupt memory in such a way that an attacker could execute arbitrary code in the context of the logged-on user.
Microsoft also recommends that Windows users deploy the Enhanced Mitigation Experience Toolkit (EMET), which helps prevent vulnerabilities in software from successfully being exploited.
Internet Explorer users can also configure Internet Explorer to prompt before running Active Scripting or disable Active Scripting in the Internet and Local intranet security zone. These mitigations can be found in the "Suggested Actions" of Microsoft's pre-patch advisory.
Internet Explorer users should keep in mind that this vulnerability is different from another under-attack issue fixed yesterday with the MS12-037 bulletin.