Update: This morning I see phrases like "radiation released into the environment" (dailykos.com blog), "low levels of radiation wafting into Tokyo" (Reuters news story) and "fleeing...amid fears that radiation...will reach the city. " (ctv.ca)
The authors of each of these quotes have confused radiation with radioactivity. Radioactivity is much worse than radiation. If you don't understand the difference, please read on.
I didn't really understand the difference between radiation and radioactivity until about 5 years ago, so for all of you who have also missed the distinction, consider this a public service announcement. (But keep in mind that I am not a physicist, and may have some of the details wrong here.)
Radiation is energetic particles, such as photons (gamma rays), electrons (beta particles), helium nuclei (alpha particles) or neutrons (the really deadly ones). They have enough energy that when the collide with cells in your body, they can cause damage to the cells. If enough of your cells are damaged by radiation, you get sick. If the radiation damages your DNA, it may increase your chance of getting cancer.
You can protect yourself from radiation with shielding. The amount of shielding required depends on the type of particle and how much energy it has. Alpha particles are easiest to shield against; neutrons are hardest, I think. Radiation also decreases dramatically with distance, so if you are far away from radiation, you're safe from it. [In comments, FishyJoe correctly points out that the UV radiation from the sun can still be dangerous at great distances.] When the energetic particles being radiated collide with something, then their energy dissipates and they are no longer dangerous.
Radioactivity is the process by which certain substances (such as Uranium) release radiation. In contexts like the unfolding nuclear disaster in Japan, the term "radioactivity" is also used to mean those radioactive substances themselves. And that is a completely different and scarier thing.
If a failed nuclear power plant is releasing radiation that means that people nearby (like just outside of it) are at danger of being irradiated if they don't have proper shielding. Just like if you had lots of xrays without the lead shield.
But if a failed nuclear power plant is releasing radioactivity, that means that little bits of radioactive matter are floating around, blowing with the wind, being breathed in, being tracked around on people's clothes and shoes and so on. And each little radioactive particle is releasing radiation that whole time This is particularly bad if the particles get inside your body. This is the danger of radioactive fallout.
I see the phrase "radiation leak" used in the press about Japan. That is a strange phrase if they're really talking about radiation. Radiation escapes, maybe, but I don't think I'd talk about it leaking as if it were a liquid or a gas. I fear, therefore, that the phrase "radiation leak" as used in news stories really means "leak of radioactive substances". (The same thing goes for the phrase "radiation released into the environment".) A release of radioactivity is a lot worse, and would explain why people who live 20km away from the plants are being told to stay indoors. Radiation being released from a crippled reactor would not be dangerous at 20km, but radioactive isotopes being released into the air 20km away can come to you and get inside your body and expose you to radiation from up close.
The units used to measure radiation and radioactivity are really confusing. Physicists use one set of units to describe the radiation emitted by a radioactive source and biologists and nuclear medicine people use other units to measure the radiation dose that is actually absorbed. And there are old units and SI units. 1 Becquerel (Bq) is one radioactive decay per second. 1 Curie (Ci) is 3.7 billion Bq. Millicuries (mCi) are more commonly used that Curies. Becquerels and Curies just measure how many particles of radiation are being emited, but don't say anything about the energy of those particles.
The unit I've seen used about the Japan disasters are Sieverts. These measure the a dose of radiation and attempt to quantify the human biological effects of radiation. The older, non-SI unit is rem, which stands for "Roentgen Equivalent Man". (Roentgen is yet another unit, that has something to do with how much ionization in air is produced by radioactivity.) Note that a dose of radiation is the product of the amount of radiation and the time you're exposed to it. So you'll see radiation levels quoted as some number of millisieverts per some unit of time. If you were exposed to that level of radiation for that amount of time, that is the radiation dose you would receive.
I've read that Japanese authorities are distributing potassium iodide (KI). So I'll end with a note about that. Some of the common radioactive substances that occurs in nuclear reactions are isotopes of Iodine. As radioactive elements go, they're not all that bad. But, and this is a big but: our bodies concentrate iodine in our thyroid glands. So if you breathe or eat radioactive iodine, it will quickly concentrate in your neck, and may well cause thyroid cancer. If, however, your system is already flooded with iodine, then your thyroid doesn't need anymore, and most of that radioactive iodine will instead be flushed out of your body in your urine, and will do much less harm.
So, if you take KI before you are exposed to radioactive iodine, it will protect you, to some extent. It does not protect you from radiation. And it does not protect you from other kinds of radioactivity, such as Strontium which can concentrate in your bones. And, if you have already had your thyroid gland removed (because of thyroid cancer) then there is no need to take KI.
That's just about all I know on these matters. I hope you found it helpful. If I've made mistakes, feel free to correct me in the comments.