From the WordPress Development Blog:

Version 3.0.4 of WordPress, available immediately through the update page in your dashboard or for download here, is a very important update to apply to your sites as soon as possible because it fixes a core security bug in our HTML sanitation library, called KSES. I would rate this release as “critical.”

So critical, in fact, that it’s “but this one is worth putting down the eggnog for”.

Go forth and update! 🙂