PanicPress is a WordPress plugin that protects your blog from hackers or anyone else who may want to deface or access your blog without authorization. The PanicPress plugin requests a unique ID from anyone trying to access your blog administration section. Known-good devices will be allowed in. Known-bad devices will be locked out.
Unknown devices will cause a text message to be sent to your phone, alerting you to the problem. If it was just you on a new computer, you can reply with "yes", and go about your business normally. But if it wasn't you, reply with "no" and the attacker will be blocked from accessing your administration section. Getting many of these requests? Reply with "panic" and your administration section will shut down, disguising itself as a PHP error until you can take a closer look into the situation.
No! Only the administration backend is disabled - the rest of your blog will work just fine!
Nobody will be able to make or edit posts, change or edit themes, moderate or remove comments, or perform any other administrative functions until you decide.
Unfortunately not. The PanicPress service requires you install the PanicPress plugin on your blog, and WordPress.com doesn't allow plugins for hosted blogs. You can still use PanicPress on any self-hosted WordPress install that you can install plugins on though, and moving your blog to a self-hosted solution couldn't be easier!
Most of fixing your hacked blog doesn't happen via the administration section. Backing up your blog, cleaning up your defaced themes, updating wordpress and plugins - all this can be done via your hosting interface or FTP.
WordPress.com has a great list of what to do if your blog gets hacked.
PanicPress is a great way to ensure that nobody but you and the people you approve can access your blog's administration section. But there are other ways your blog can be attacked - if a hacker attacks your web server and gains FTP access to your hosting account, he can delete your entire WordPress installation - including the PanicPress plugin - and replace it with whatever he wants. In order to prevent problems like this, you should also take the following precautions:
Your blog's security relies on you! Keep an eye on your blog - the first person to notice it has been hacked may easily be you!