This isn't the first glaring hole in security that has been identified by the community; but it's most certainly the first to get renowned Mac hacker, Charlie Miller, kicked out of the iOS developer program.

The security flaw surrounds the opportunity to run unsigned code in the memory of the browser, which he then expanded to include apps.  This means that the hidden code doesn't get screened in the all important code-signing check, a fundamental to iOS security.  What results is the opportunity to program seemingly complaisant apps that download and run unauthorized code in the background throughout the entire system.