The software, as far as I can tell, is a simple data-leeching utility. With a satellite dish and a few parameters (Packet IDs and transponder codes, which you can evidently scan for) you can tap into downstream data feeds, and essentially recording whatever data is transmitted to (specific) other users on a satellite network. How the insurgents got the proper parameters for predator drone, I have no idea - but apparently it's not that hard. Says defence Secretary Robert Gates:
There did appear to be a vulnerability. There's been no harm done to troops or missions compromised as a result of it, but there's an issue that we can take care of and we're doing so.
If 12-year-olds can encrypt their torrent downloads, I think it's a fair expectation for the US military to be able to encrypt mission-critical data transmissions, the insecurity of which could kill people. (Or, alternatively, the security of which ensures that that we can kill people. Someone's got to die, right? Right? Right.)