Long story short: If you downloaded WordPress 2.1.1 within the past 3-4 days, your files may include a security exploit that was added by a cracker, and you should upgrade all of your files to 2.1.2 immediately.
Longer explanation: This morning we received a note to our security mailing address about unusual and highly exploitable code in WordPress. The issue was investigated, and it appeared that the 2.1.1 download had been modified from its original code. We took the website down immediately to investigate what happened.
Just when you thought it was smart to perform changed files upgrades, they find a security breach and recommend you flatten your installation and start over with a clean install. Oh well!