This update includes a new version of SSH (OpenSSH 4.2) which uses a new mechanism for doing Kerberos authentication. The new version fixes a weakness in the old version. Unfortunately, the two mechanisms don't inter-operate and there is no backwards compatibilty provided.
Before applying the 10.4.7 update, make a copy of /usr/bin/ssh so that you'll have the old version for connecting to old servers.
See http://listserv.fnal.gov/scripts/wa.exe?A1=ind0608&L=macusers