Here are the basic details from the article (expensive reg. req.), because I can't find this story anywhere else. Strange that the WSJ should have the scoop on a security issue.
Microsoft Acknowledges Its Engineers Placed Security Flaw in Some Software
By TED BRIDIS
Staff Reporter of THE WALL STREET JOURNAL
Microsoft Corp. acknowledged Thursday that its engineers included in some of its Internet software a secret password -- a phrase deriding their rivals at Netscape as "weenies" -- that could be used to gain illicit access to hundreds of thousands of Internet sites world-wide. [...]
The company planned to warn customers as soon as possible with an e-mail bulletin and an advisory published on its corporate Web site. Microsoft urged customers to delete the computer file-called "dvwssr.dll"-containing the offending code. The file is installed on the company's Internet-server software with Frontpage 98 extensions.
While there are no reports that the alleged security flaw has been exploited, the affected software is believed to be used by many Web sites. By using the so-called back door, a hacker may be able to gain access to key Web-site management files [...]
Russ Cooper, who runs the popular NT Bugtraq discussion forum on the Internet, estimated that the problem threatened "almost every Web-hosting provider." [...]
And, Black Parrot passed along this link to a CBS Marketwatch story, which is free but short on detail.