What is it? A vulnerability in a command interpreter found on the vast majority of Linux and UNIX systems, including web servers, development machines, routers, firewalls, etc. The vulnerability could allow an anonymous attacker to execute arbitrary commands remotely, and to obtain the results of these commands via their browser. The security community has nicknamed the vulnerability “shellshock” since it affects computer command interpreters known as shells.

via Flurry of Scans Hint That Bash Vulnerability Could Already Be In the Wild – Slashdot.

This is a very confusing issue.  I found the above comment to be the most informative right now as this issue unfolds.

How bad could it be? Very, very bad. The vulnerability may exist on the vast majority of Linux and UNIX systems shipped over the last 20 years, including web servers, development machines, routers, firewalls, other network appliances, printers, Mac OSX computers, Android phones, and possibly iPhones (note: It has yet to be established that smartphones are affected, but given that Android and iOS are variants of Linus and UNIX, respectively, it would be premature to exclude them). Furthermore, many such systems have web-based administrative interfaces: While many of these machines do not provide a “web server” in the sense of a server providing content of interest to the casual or “normal” user, many do provide web-based interfaces for diagnotics and administration. Any such system that provides dynamic content using system utilities may be vulnerable.