When your browser goes to Citibank, it gets to see the entire certificate chain (the server sends back a PKCS blob of the entire chain). It validates not only that the Citibank cert was signed by FredCA, but it also validates the signature on FredCA's certificate. If it trusts Verisign, then it makes sure that the certificate is definitely one it knows maps to verisign, and then everything is trusted.
A lot of people here seem to believe that the attack is that a bad guy can take the cert that FredCA endorsed for CitiBank or the cert that Verisign endorsed for FredCA (as long as the signature uses MD5), and steal the signature for their own certificate. If that were true, then we could not trust any certificate signed by MD5. Good thing that most certs have been issued via SHA1 for a while.
But, that is not true. In this attack, the bad guy can generate a pair of certificates, one that the CA signs, and another for which the same signature happens to be valid. You cannot do this to any cert on the internet, the pair of certificates have to be specially crafted.
In this attack, the bad guy gets FredCA to sign a certificate for DummyOrg, but when the bad guy created the DummyOrg cert, he created a matching cert for his own CA, call it EvilCA. Since the certs were created together in a particular way, the bad guy can take the signature off the DummyOrg cert and paste it onto the EvilCA cert and everything will work.
With the EvilCA cert, he can create certificates that claim to be from any site on the internet, even though they are not. When they get to the browser, the browser looks at the whole chain, and it looks good, even though FredCA never signed the EvilCA certificate. However, once we blacklist the signature for the DummyOrg cert, we will immediately blacklist everything endorsed by EvilCA, because when a browser goes to validate the whole chain, they'll see that the certs are issued by a blacklisted CA, and thus would know that the certificate is fake.
Also, note that there's a good reason to believe this hole will be closed well before any bad guys actually try the attack. At most, the world will have to blacklist a small handful of rogue CA certs.
Additionally, for the CAs other than RapidSSL, it's not clear they can be attacked easily. As far as I know, they all usually sign with SHA1. I don't know how you would get them to choose MD5, but I suspect none of them will do it anymore after this. And, even if they did, you would need to know how to predict their sequence number and the date values they add to the certificate. With RapidSSL that was all automated and very predictable. It could be with the other CAs, but it isn't necessarily the case.
Hope this helps.
From what I understand from your posts, you're saying I don't need to create two certs with the same hash, I "just" need to create a new cert that matches an existing web site's cert. That's not true, and some intuition should demonstrate it. If you understand the birthday paradox, it says that, with brute force for MD5 (that is, if we assume MD5 is perfect), my explanation (remember, brute force), would be O(2^64) to attack. Yours would be O(2^128). Now, if someone has tricks to do better than brute force, perhaps they'd work in your context but not mine, or vice versa. Or, more likely, any structural weaknesses in MD5 are likely to have implications for both kinds of attack. Now, since O(2^64) was already near the border of feasibility, while O(2^128) was very far from it, which kind of attack was likely to become more practical first?
The whole point of my post on O'Reilly was that people do seem to think the research in question represents the scenario you're talking about. If that were the case, we would indeed have to quickly stop allowing even legacy MD5 certificates, which would be a little painful. But, that is absolutely not the case. If the few risky CAs deal with the problem quickly, this will be a huge non-event.
Your use of the word 'twitterverse' marks you as a complete douchebag.
The Tao is like a glob pattern: used but never used up. It is like the extern void: filled with infinite possibilities.