This vulnerability is yet another reason address reuse in Bitcoin clients must be eliminated.
Prior to this, using non-deterministic wallets was either a privacy disaster (single key model) or else a usability nightmare (random key model).
Now anything which encourages address reuse should be considered negligent.
Not really. This is a problem with a specific implementation of a specific secure random number generator (android).
Yes really. Payment addresses should not be re-used after money is spent. If you do not re-use the address then you can not fall victim to this if your random generator is not as random as it should be.
But that has nothing to do with deterministic wallets. Non deterministic wallets do not require address re-use.