Not that bad, as these things go

Well, the server was hacked [1], but it looks to be a customer account was compromised, since the executables where owned by a customer account, the processes were running on unpriviledged ports, and the server was being used as part of denial of service attacks, with executables hidden under a hidden directory in /var/tmp.

Fortunately, the system hacked is running Linux without module support, so patching system calls [2] to hide activity is impossible without a reboot (which would be noticed).

And as always, it could have been worse [3].

[1] /boston/2006/01/16.3

[2] http://lib.ru/SECURITY/linux_module_heroin.txt

[3] /boston/2004/09/19.1

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