What does the texture exploit allow someone to do?

I don't want details of how to use the exploit. Please do not post such details in this thread. What I would like to know is what exactly this exploit allows. I have the impression it allows you to create an object and apply any texture you can see (regardless of permissions) to the object. Is that all? Does it bypass the usual texture permissions (e.g.: applying a texture that is "no copy" doesn't make the object no copy, etc? Does it work on skins/clothes at all?

I want an idea what sort of liability I'm facing here, since a lot of the work I do gets its value from the textures that make it up, and the Linden response has been rather underwhelming.

It allows you to make a somewhat acceptable replica of any texture that is applied to an object or attachment, any prim in short. I don't want to disclose anymore how good a quality can be achieved. Textures up to 512x512 are not safe, as I earlier indicated, 1024x1024 is debatable. It works even if no permissions are granted.

Terrain, skins and non-prim clothes are not affected.

Since I've already communicated the necessary details to LL (Brent and Torley) I will not give further details. There's enough panic as it is.

Thanks. Sounds rather worrying.