Well, Google said it is rolling out now, but trust me, based on the volume of posts in the forums and complaints, it is indeed being rolled out and seen by webmasters.
Google is calling the update the "webspam algorithm update" according to Danny Sullivan Google told Danny:
I think 'over-optimization' wasn't the best description, because it blurred the distinction between white hat SEO and webspam. This change is targeted at webspam, not SEO, and we tried to make that fact more clear in the blog post.
Either way, Cutts explains somewhat of what this algorithm update targets. It seems to go after content spam, spun articles and keyword stuffing. Here are screen shot examples given by Cutts:
Of course, content out there just for link spam:
Google said it might not be able to see which types of sites would be affected by it by just glancing at the site. Google said to detect these sites it would require "deep analysis or expertise."
3% Of Queries Affected
While Panda impacted about 12% of search queries, this impacts about 3%. Cutts wrote:
For context, the initial Panda change affected about 12% of queries to a significant degree; this algorithm affects about 3.1% of queries in English to a degree that a regular user might notice. The change affects roughly 3% of queries in languages such as German, Chinese, and Arabic, but the impact is higher in more heavily-spammed languages. For example, 5% of Polish queries change to a degree that a regular user might notice.
Update: This is now named the Penguin Update.