Microsoft has published an important security bulletin MS11-071 describing the vulnerability in all versions of Windows.
The essence of the vulnerability is that if a user opens a .txt file from a network folder, then the malicious code from the .dll in the same network folder as the .txt file can run on its system. As a result, the attacker can get the same rights in the system as the user has. In addition to .txt, the vulnerability covers .rtf and .doc files.