Looks as though we won't have a fix for the iPhone alarm bug today, or anytime in the next few days. If you are running the GM of iOS 4.2 you have no problem, but it's only for developers right now.Never fear there is a temporary fix that apparently to work, and is blessed by Apple. For starters the bug seems to only impact repeating alarms.
One off alarms, specific to one day, don't seem to be impacted. To set, go to the Clock app. Turn off your repeating alarms or delete them. Then create a one time alarm, set Repeat to "Never." Now just choose which time you want to wake-up. According to Apple and our friends in Europe this should work. You will just have to set the alarm every night until Apple releases iOS 4.2. This is a huge pain, but we are not alone. Tomorrow I will do some testing to see if there are any work arounds beyond Apple's chosen solution. Can't test though until Daylight savings time ends. It's possible that 3rd party Alarms will work fine, but I'm not sure.
Goodnight and good luck.
UPDATE 11/7/10 9:01 AM - I've been attempting to recreate this bug on my iPhone 4 running iOS 4.1, but so far haven't been able to do so. I'm not sure why, but will continue researching. It may be that this is a one day only bug, and all returns to normal on Monday.