From Riding Rails:
This is a MANDATORY upgrade for anyone not running on a very recent edge (which isn’t affected by this). If you have a public Rails site, you MUST upgrade to Rails 1.1.5. The security issue is severe and you do not want to be caught unpatched.
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As always, the trick is to do “gem install rails” and then either changing config/environment.rb, if you’re bound to gems, or do “rake rails:freeze:gems” if you’re freezing gems in vendor.
Update: Seems that just versions 1.1.0, 1.1.1, 1.1.2, and 1.1.4 are affected.
Good news: Rails 1.0 and prior is not affected by the latest security breach we’ve experienced. Neither is Rails 1.1.3.

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