The privacy issue was discovered by two security researchers, one of which apparently used to work for Apple. The location info is easy to access, both on your phone (or iPad) or on any computer that you've synced it to. The location info appears to rely on tower triangulation rather than GPS data, meaning it locates you even if you have location services switched off.
Curious what your tracking data looks like? You can download the program that opens up the info and sticks it on a Google Map, showing exactly where you've gone since June. It is scarily accurate.
This is definitely not good. You can expect a response from Apple pretty soon about this one.
Peter Warden via Gizmodo