The MD5 security algorithm has been compromised for a long time. Any new application still using it is asking for trouble.
From wikipedia:
In 2004, more serious flaws were discovered making further use of the algorithm for security purposes questionable.[2][3] In 2007 a group of researchers including Arjen Lenstra described how to create a pair of files that share the same MD5 checksum.[4] In 2008 a group of researchers used MD5 collisions to fake SSL certificate validity.[5]
As for this specific attack, there are not many details on how they did it yet. I wonder if they couldn't have used GPUs as well, which are faster and quite flexible when programmed with things like Nvidia's CUDA. There are already implementations of MD5 cracking with GPUs:
http://bvernoux.free.fr/md5/index.php
My Mario Kart Wii friend code: 2707-1866-0957
