UPDATE: It appears this is solely related to the “Instant Hijack” plugin found in Rogue Amoeba’s Audio Hijack application. To resolve it you need to remove the Instant Hijack plugin. if you want to test to see if this is the case prior to uninstalling the plugin use:
sudo /usr/local/hermes/bin/hermesctl unload
UPDATE 2: Rogue Amoeba have released a new version of Instant Hijack to resolve this SSH issue. I have installed it and it does indeed resolve all reported SSH problems.
There have been quite a few posts about the latest patches from Apple and how they appear to break SSH via the Terminal and SFTP via any FTP client. I haven’t update to the latest version of Safari (3.1) or Apple’s security update 2008-002 so I cannot confirm or deny.
It appears that a lot of people are getting “bus” errors. So if you need or use SSH on a daily basis (like I do) I’d advise caution until there is more information.
You can read more about these issues on the Apple forums here