Users of iPhone 3GS or later, iPad 2 or 3 and iPod Touch 4th generation or later can download and install the update using Settings-General-Software Update, or by synching through iTunes. As indicated just below, some iPhone 5 users may have to perform the update through iTunes.
Apple lists the following bugs fixed, but indicates that there are others:
Fixes a bug that prevents iPhone 5 from installing software updates wirelessly over the air
Fixes a bug where horizontal lines may be displayed across the keyboard
Fixes an issue that could cause camera flash to not go off
Improves reliability of iPhone 5 and iPod touch (5th generation) when connected to encrypted WPA2 Wi-Fi networks
Resolves an issue that prevents iPhone from using the cellular network in some instances
Consolidated the Use Cellular Data switch for iTunes Match
Fixes a Passcode Lock bug which sometimes allowed access to Passbook pass details from lock screen
The security issues are all serious, although it's doubtful any of them are being exploited in the wild, let alone widely. 2 are bugs in WebKit, the HTML rendering engine in iOS and many non-Apple web browsers. Both would allow compromise of the phone simply by visiting a web page. This sort of bug has been used in the past as part of jailbreaking.