According to their information almost all computers in the department (Linux boxes on Intel, SunOS/Solaris on SPARCs and several other architectures and OSes, I guess) have been compromised.
Someone seems to have retrieved the shadow file(s) with the encrypted user passwords. Two cases have already become known where private user data was accessed using cracked passwords, presumely from the stolen shadow file(s).
Students and researchers are advised to change their passwords as soon as possible. This also affects email, as the same password is used for IMAP/POP3 at the department. Also, one should check all computers, websites etc. where you can login without supplying a password, as those might be compromised, too.
As a preventive measure, user accounts are now handled via LDAP and user accounts where the password isn't changed soon, will be disabled.
As of now, there's no information available how the attackers got hold of the shadow file(s), i.e. which vulnerability in which service they exploited etc.
Update: The whole announcement of the admin group is now available from http://wwwrbg.in.tum.de/passwort_aendern.html (German).