UPnP is a convenience service used to query and control network devices in a LAN without a hassle... meaning without proper authentication and access control. Which is perfectly fine in the context of your home LAN under the assumption that access will be granted only to trusted clients. The problem is: a lot of routers fail at blocking the UPnP port (UDP 1900) on the public WAN interface, making your router accessible to the entire internet. And then, most router products employ outdated, vulnerable UPnP frameworks for which a lot of exploits are publicly available. So think about the consequences: your router is your gateway to the internet, it handles all traffic to and from your laptops, tablets and iphones, and it is probably always on... it's the perfect jumpstation for man-in-the-middle attacks.
There are several online tools to check whether your router has UPnP enabled and if it is vulnerable to corresponding attacks, e.g. here or here. If you prefer testing it yourself, get a recent version of nmap, and type this into your console:
$ sudo nmap -Pn --script upnp-info.nse -p 1900 -sU 10.0.0.1 Starting Nmap 6.25 ( http://nmap.org ) at 2013-05-14 00:22 CEST Nmap scan report for 10.0.0.1 Host is up (0.0010s latency). PORT STATE SERVICE 1900/udp open upnp | upnp-info: | 10.0.0.1 | Server: Linux/2.6.12, UPnP/1.0, NETGEAR-UPNP/1.0 | Location: http://10.0.0.1:5000/Public_UPNP_gatedesc.xml | Webserver: Linux/2.6.12 UPnP/1.0 NETGEAR-UPNP/1.0 | Name: WGR614v9 | Manufacturer: NETGEAR, Inc. | Model Descr: Wireless-G Router | Model Name: WGR614v9 | Model Version: WGR614v9 | Name: WAN Device | Manufacturer: NETGEAR, Inc. | Model Descr: Wireless-G Router | Model Name: WGR614v9 | Model Version: WGR614v9 | Name: WAN Connection Device | Manufacturer: NETGEAR, Inc. | Model Descr: Wireless-G Router | Model Name: WGR614v9 |_ Model Version: WGR614v9 MAC Address: C0:3F:0E:2D:12:F8 (Netgear)
The response to the discovery packet sent by nmap already contains various informations about the device, notably the webservice endpoint to which clients can address their UPnP calls (this is the actual vulnerable service). Also very interesting, the string "UPnP" occurs in the webserver banner. This makes it very easy to search for potential targets using a metadata search engine.
The best countermeasures for this insecurity is to keep your router firmware up to date and disable the UPnP feature. Better do it soon :-)