How is the transaction malleability issue being fixed? With the upcoming release of Bitcoin Core 0.9, I am wondering how the transaction malleability issue is being fixed and what are the consequences of the fix?

It appears that transaction malleability is causing a few problems for the Bitcoin network:


The network is DDoSed by multiple apparent double-spends being relayed
Senders of the transactions need to avoid spending 0 confirmation transactions in case they become invalidated by malleability
When saving TxIDs of spent transaction for record keeping one has to make sure the TxID did not get changed later


Will all of those issues be addressed in the upcoming update, and if so, how will they be addressed?
Transaction malleability is a consequence of the features of Bitcoin. The input data (scriptSig) for claiming outputs is purposely malleable to allow for useful scenarios where one would want to claim outputs in different ways.

The consequence of these features is that the hash of the transaction changes and shouldn't be considered as a useful piece of information other than referencing outputs of transactions that have been confirmed.

With that being said, I'm not sure what changes the client could implement to prevent the hash from changing. Perhaps it can enforce specific rules, like making non-canonical data pushes non standard, however that may interfere with later extensions to Bitcoin.