A design feature - or possibly bug - or possibly both - means that Internet Explorer can be turned into a web server which will leave your computer's files open to being read online, according to a hacker who demonstrated it at the Blackhat DC conference.

Network World reports that

"The flaw, said to extend across all versions of Internet Explorer, is not subject to a patching fix, according to Jorge Luis Alvarez Medina, the Argentina-based security consultant with Core Security Technologies who elaborated on the attack technique during his demo. Indeed, Microsoft advised anyone concerned about the potential for this type of attack to run IE in "protected mode," a workaround that Medina also advised. "

Microsoft has, not unsurprisingly, issued a security advisory about it.

It's broadly encouraging, suggesting that it's only going to be effective against IE (all versions) in XP. Versions of Windows above that seem to be OK.

"Our investigation so far has shown that if a user is using a version of Internet Explorer that is not running in Protected Mode an attacker may be able to access files with an already known filename and location. These versions include Internet Explorer 5.01 Service Pack 4 on Microsoft Windows 2000 Service 4; Internet Explorer 6 Service Pack 1 on Microsoft Windows 2000 Service Pack 4; and Internet Explorer 6, Internet Explorer 7, and Internet Explorer 8 on supported editions of Windows XP Service Pack 2, Windows XP Service Pack 3, and Windows Server 2003 Service Pack 2. Protected Mode prevents exploitation of this vulnerability and is running by default for versions of Internet Explorer on Windows Vista, Windows Server 2008, Windows 7, and Windows Server 2008."

Read more: http://www.guardian.co.uk/technology/blog/2010/feb/05/internet-explorer-new-flaw