The lack of input validation turns into a method for gleaning sensitive information such as login credentials, browser cookies, and more via specially crafted URLs sent in email links, posted on message boards, etc. You can think of XSS as an open spam relay on your email server. A direct exploit may or may not exist (depending on the context) but it still creates liability issues that your business probably doesn't want to take on.
Here are some other useful on how to handle XSS issues:
cross-site scripting (XSS) application flaws checklist
Cross-site scripting (XSS) is a major concern, it can be unpredictable and requires multiple tools to test it. Expert Kevin Beaver sheds light on XSS issues and recommends tools.
security improved, but more can be done
A study of website security finds that although efforts are being made to prevent well-known attacks such as XSS and SQL injection, threats of newer attacks are rising.
stamp out XSS cross scripting errors
Web-based application development expert Dan Cornell explains how to proactively reduce cross site scripting and SQL injection vulnerabilities
This was first published in March 2010