Andrew Wiles, a researcher at Princeton, claims to have found a proof. The proof was presented in Cambridge, UK during a three day seminar to an audience which included some of the leading experts in the field. The proof was found to be wanting. In summer 1994, Prof. Wiles acknowledged that a gap existed. On October 25th, 1994, Prof. Andrew Wiles released two preprints, Modular elliptic curves and Fermat's Last Theorem, by Andrew Wiles, and Ring theoretic properties of certain Hecke algebras, by Richard Taylor and Andrew Wiles. The first one (long) announces a proof of, among other things, Fermat's Last Theorem, relying on the second one (short) for one crucial step.
The argument described by Wiles in his Cambridge lectures had a serious gap, namely the construction of an Euler system. After trying unsuccessfully to repair that construction, Wiles went back to a different approach he had tried earlier but abandoned in favor of the Euler system idea. He was able to complete his proof, under the hypothesis that certain Hecke algebras are local complete intersections. This and the rest of the ideas described in Wiles' Cambridge lectures are written up in the first manuscript. Jointly, Taylor and Wiles establish the necessary property of the Hecke algebras in the second paper.
The new approach turns out to be significantly simpler and shorter than the original one, because of the removal of the Euler system. (In fact, after seeing these manuscripts Faltings has apparently come up with a further significant simplification of that part of the argument.)
The papers were published in the May 1995 issue of Annals of Mathematics. For single copies of the issues send e-mail to jlorder@jhunix.hcf.jhu.edu for further directions.
In summary:
Both manuscripts have been published. Thousands of people have a read them. About a hundred understand it very well. Faltings has simplified the argument already. Diamond has generalized it. People can read it. The immensely complicated geometry has mostly been replaced by simpler algebra. The proof is now generally accepted. There was a gap in this second proof as well, but it has been filled since October 1994.