It's not a terribly serious setback in the history of space flight, but it could be a serious blow to Orbital.
Their whole program is built around the idea of using old surplus Soviet-era rocket engines, originally designed for the ill-fated N1 program. (The N1 program, as a sidenote, is responsible for one of the largest non-nuclear explosions in human history when one of its launch vehicles had a failure shortly after takeoff. On top of a zero-for-four launch record, it's not the program I'd pick to emulate.)
My understanding of the Soviet engines is that they have some design features that make them lightweight for their output, but represent tradeoffs not typically taken on Western engines, due to the risk of "burn through". But some people--perhaps including Orbital--thought that the designers had solved the problem and the risks were overstated.
Too early to tell right now, but if the engines turn out to have a fatal flaw, that would be bad for Orbital. It'd probably be good for SpaceX, since they're the obvious alternative, but it'd leave NASA down one contractor for the commercial launch program.