Critical vulnerabilities have been identified in Adobe Reader 7.0 through 7.0.8 that could allow an attacker to take control of your machine. Adobe is recommending that users update to Adobe Reader 8. For complete steps please see our How To Install and Configure Adobe Reader for Windows.
If you have installed the FULL version of Adobe Acrobat 7 (software that allows you to create PDF documents), Adobe has workaround steps to update the AcroPDF.dll on your machine. This will allow you to keep Adobe Acrobat 7 Professional on your machine and be safe as well. Follow Steps 1 - 5 from the Solution section of this Adobe Security bulletin.
Again, folks who just have Adobe READER installed, should upgrade to Adobe Reader 8.