According to CNET, hackers compromised the online giant's servers beginning in February or March of this year. The company only noticed the issue two weeks ago. In the course of their investigation, eBay has determined that Paypal (also owned by eBay) accounts have not been affected. According to eBay (so far), financial information on eBay servers has not been stolen as they are stored on separate servers using a different type of encryption. It appears that the breach was accomplished by compromising the login credentials of eBay employees.
I am sure there will be more information forthcoming about this hack - losing the data of 110 million people will generate some interest. In the meantime - change your password on eBay, and if your PayPal password is the same as your eBay password change that one too.