An attacker can gain user level control if you open an image in IE or windows explorer. The exploit was revealed before a patch was available to fix it:
http://www.securityfocus.com/brief/89
Since the first notice of this vulnerability in WMF (Windows MetaFile), several other modified exploits have been released. Vendors and administrators are struggling to find ways to protect machines before a virus outbreak takes advantage of it, as a spammer alrady has:
http://www.f-secure.com/weblog/archives/archive-012006.html
An email is being sent around attached with "HappyNewYear.jpg". When it is viewed, a Bifrose backdoor is downloaded. There is a workaround that involves unregistering a DLL:
http://www.eweek.com/article2/0,1895,1906211,00.asp
Using the simple command:
regsvr32 /u shimgvw.dll
However some readers have noted that this also disables the Thumbnail viewer.
Here is a more detailed explanation of how this exploit works:
http://www.kb.cert.org/vuls/id/181038
There is an unofficial hotfix available written by Ilfak Guilfanov, located at http://www.hexblog.com. I have mirrored the hotfix at http://www.antisource.com/download/wmf_checker_hexblog.exe