Imran Ghory found a race condition in the handling of output files. While a file was unpacked by unzip, a local attacker with write permissions to the target directory could exploit this to change the permissions of arbitrary files of the unzip user.
Solution: The problem can be corrected by upgrading the affected package to version 5.51-2ubuntu0.2 (for Ubuntu 4.10), or 5.51-2ubuntu1.2 (for Ubuntu 5.04). In general, a standard system upgrade is sufficient to effect the necessary changes.