This is beginning to get tedious: (yet) another Java zero-day exploit is in the wild.
This one appears to have been floating around for a few days (but has just been publicly disclosed) and has been adopted by some of the more troublesome malware toolkits such as Blackhole. It affects all versions up to and including the latest version (Java 7 Update 10). This makes it rather more serious and dangerous. There are posts on various “grey” sites demonstrating real world exploits in use right now.
Here’s a quick guide to disabling Java plugins in the browser as a quick patch until Oracle can do something more permanent.
Even easier though: if you have Java 7 Update 10, you can open the Java Control Panel and un-tick the Enable Java content in browser setting under the Security tab….