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Toumal is a bit vague in the description, but it looks to me like he's saying: the passwords used to be stored as MD5 hashes, and the MD5 hashes could be retrieved by some site vulnerability, which means a dictionary attack could quickly crack weak passwords. Also, the MD5 hashes were unsalted, so a rainbow table attack could quickly crack many weak passwords. And this vulnerability existed for over a year.
Basically, change your SoFurry password, and if you used the same password anywhere else, you might want to change those too.
Furcadia players logged-in early this morning were surprised to find a list of usernames, emails and passwords arriving through the online news channel.
A short student film, made for a 48-hour film contest. It has fun with a furry stereotype in a pretty tame, good-natured way. I met the fellow who put this together at a science-fiction convention; he gave me the link - he's a nice guy, and we had a good talk about the fandom together.