Trace is not a vulnerability in the TRACE command, or in the Apache web server. Rather it is a browser issue that can occur with certain browsers that can be scripted. The TRACE request has been blown out of proportion by the press who do not understand what they are reporting on.
This was first reported in 2003 I believe, and would probably be better served if turned off on the server and it may have been fixed within the browser in question.
I don't think most people need to be concerned greatly about the issue (personal opinion only), though it is possible a hacked site could be serving the carefully crafted pages to gain online banking credentials I suppose. I'm not saying it should be or should not be added. It probably should, though if an attacker has access to your site to insert the pages etc., they can remove it from htaccess.
For those who don't understand much about this issue, read on. The info below came from the sites I referenced below which do a better job of explaining the issue than the site posted in the above post.
When an HTTP TRACE request is sent to a web server the server will respond by echoing the data that is passed to it, including any HTTP headers. As the paper explains, some browsers can be scripted to perform a TRACE request. A browser with this functionality can be made to issue a TRACE request against an arbitrary site and pass the results on to a different place. Browsers will only send authentication details and cookies to the sites that issue them. This means a user having a browser with scripting functionality could be tricked into sending cookies or authentication details for arbitrary sites to an attacker.
For example, if you visited a site that has a page that an attacker has carefully crafted, the page could cause your browser to bounce a TRACE request against some other site for which you have authentication cookies for. The result of the TRACE will be a copy of what was sent to the site bounced against. This will include cookies and/or other authentication data from that site bounced against. The carefully crafted page from the site that was attacked can then pass that information on to the attacker.
The same browser functionality that permits the published TRACE attack can be used for different attacks even if TRACE is disabled on the remote web server. For example an attacker could again create a carefully crafted page that when visited submits a hidden request to some arbitrary site through your browser, grabs the result and passes it to the attacker.
Reference:
In the news, Cross-Site Tracing issues
http://www.apacheweek.com/issues/03-01-24#newsWhitePaper, TRACE Request Method
http://www.cgisecurity.com/whitehat-mir ... _ebook.pdf