The hole is exploited by hackers by sending a specifically crafted cookie to the vulnerable device that allows the perpetrator to take administrative control of the device. The flaw is called the "misfortune cookie" because this could be used to the misfortune of the router owner.
Your router is probably the most important piece of network equipment that must remain secure. All network traffic goes through your router to get to the Internet.
To find out if your router is affected visit mis.fortunecook.ie for information on the bug. As always, if you are unsure of how to accomplish this on your own do not hesitate to contact your technology professional before it is too late.