Unicode Vulnerability - How and Why?

This vulnerability began its life as the MS00-057 'File Permission Canonicalization' vulnerability a vulnerability which could allow a malicious user to gain higher levels of access to certain types of files than would normally be given. However in early October 2000 an anonymous user on the Packetstorm forum posted details as to how the vulnerability detailed in the MS00-057 bulletin could be used to run a dir command on the target server. This 'Web Server Folder Traversal' or 'Unicode' vulnerability was identified by Microsoft in Microsoft Security Bulletin MS00-078. This bulletin revealed that a malicious user could 'access files and folders that lie anywhere on the logical drive that contains the web folders' and 'cause widespread damage' to the affected system. What this means is that an attacker by exploiting this vulnerability has execute privileges on any file that resides on the same logical drive as the web root folder. This vulnerability gained the nickname 'Unicode' due to the Unicode encoded characters that are used to exploit the vulnerability. However it is not actual Unicode characters that are used to exploit this vulnerability. It is the UCS Transformation Format (UTF) characters used to bridge between Unicode and ASCII character sets that are actually used to exploit this vulnerability.