This is a serious security hole that has been widely publicized and is easy to exploit. Maybe there are no reports of it being maliciously used in the wild, but if I was a virus author, I would certainly be looking at making use of it, and once a virus is written spreading URLs to it through e-mail, SMS messages, Facebook, and whatever means I could think of (infected iPhones would of course send e-mails, SMSes, etc to everyone in the contact list like any competent phone virus would).
1. If you have no intentions of jailbreaking, do the update!
2. If you have jailbroken, install the PDF Loading Warner from Cydia.
3. If you are thinking of jailbreaking, but are on the fence: Make your decision now, jailbreak if you are going to jailbreak, or not, then see #1 or #2 depending on your decision.
It's the morons who do nothing because they can't be bothered that will be responsible when an iPhone virus starts spreading.