In short, it totally destroys ASP.NET security
It soon became obvious that the article was a little bit sensationalist to say the least (see quote above). Basically the exploit is low-risk. You should only be worried if your applications aren't communicating over SSL and if you have put sensitive information in you ASP.Net application's cookies and are trusting the cookie data blindly. Sensitive data should all be stored server side - but you knew that anyway!
Needless to say, I've not wrote any code lately that checks for an SuperUser=true value in the cookie!!!