Ok, there seems to be a *lot* of posts and threads about this issue and I think a simple page is appropriate.
Lets start with the problem. Check the report for your domain here: http://www.dnsreport.com/tools/dnsreport.ch?domain=YOUR_DOMAIN_HERE.COM
An open DNS server is one that replies to a query about a domain it is not responsible for, to anyone who asks for it. For starters, that is just a waste of processing time, but it can be worse if it is used for flooding. See, since a DNS query is (much!) smaller in number of bytes than a DNS response, if it is spoofed it can be used to perform a DoS attack on a computer with several times the bandwidth of the perpretator.
I’ve posted a solution to my obscure cPanel guide, have a look if your interested:
Fixing Open DNS servers