IMPORTANT UPDATE

Recently Apple released updates for devices running iOS 6 and 7 that patched a serious security bug. It is recommended for users to update as soon as possible. This bug affects all devices running iOS 6.0 to 7.0.5 (check your current version under Settings > General > About > Version). If you are already running iOS 6.1.6 or 7.0.6, then your device is fine, and you do not need to do anything.

The bug made any secure content vulnerable to an attack. This meant that anyone with the appropriate software connected to the same Wi-Fi network as an affected device could intercept and read all wireless communications, ranging from login passwords to message content sent between apps such as Facebook or Snapchat. This makes any public Wi-Fi network very unsafe.

Non-Jailbroken Users

To update, connect the device to iTunes and under the device summary tab, select "Update".

Here are the latest versions for each device:
iPod touch 4th generation - 6.1.6
iPhone 3GS - 6.1.6
iPod touch 5th generation - 7.0.6
iPad 2, 3, 4, Air, mini, mini with Retina display - 7.0.6
iPhone 4, 4S, 5, 5S, 5C - 7.0.6

If your device is not on this list, it means that it does not support the latest iOS versions, however it is running an older iOS version that is not affected by this bug, so you won't have to do anything.

Jailbreak Users

You can install a Cydia package that performs the same fix without having to update and lose your jailbreak. Just open Cydia, refresh the package list, then install SSLPatch.

UPDATE
There is speculation that this bug was the work of NSA sabotaging Apple software. However the evidence is purely circumstantial.  

Thanks for the heads up. Going to sticky this for a few weeks, as I feel this is important to a large number of our community.  

Right I'm iOS 7.0.4

And I'd like to update but...

Every time I go to the software update tab the screen just keeps loading endlessly.

Maybe I'll try updating from a computer...  

I'm on 7.0.6 now what?

(Sorry midori when reading your post I was like what?)  

Posted by Xenthic

I'm on 7.0.6 now what?

(Sorry midori when reading your post I was like what?)

If you are already on iOS 7.0.6, then there is no need to do anything, as your device will not be affected by the bug.  

K, what if you're on iOS 5.1.1?  

Posted by NeoZX

K, what if you're on iOS 5.1.1?

iOS 5.1.1 is not affected by the bug.  

Posted by Midori

iOS 5.1.1 is not affected by the bug.

Damn straight!
I knew I'm still cool.  

Posted by Midori

This makes any public Wi-Fi network very unsafe.

So if we only log in from a password protected wifi at home we are safe?

Posted by Midori

There is speculation that this bug was the work of NSA sabotaging Apple software. .

NSA would not care about petty lil graal accounts, if they did hack into them they would only look at messages and not delete precious Jimmy's rainbow umbrella.  

I thought Apple was virus-proof.

ohp.  

Posted by Shotgunz=bawss

NSA would not care about petty lil graal accounts, if they did hack into them they would only look at messages and not delete precious Jimmy's rainbow umbrella.

This has nothing to do with Graal. This is your private, real life information.  

Posted by Shotgunz=bawss

So if we only log in from a password protected wifi at home we are safe?

As safe as your WIFI is secure(which depends entirely on how it's set up).  

Posted by Dusty

As safe as your WIFI is secure(which depends entirely on how it's set up).

More then just locked.  

Glad my iPod is broke, but now I'm going to have to check my brothers.  

Posted by PoeticFolly

This has nothing to do with Graal. This is your private, real life information.

private real life info is login stuff
I was really tired when writing that