Update 1: CNN has a video that shows a van driving by a crowd and terrorists machine gunning people. The number of sites has been upped to 9.
Gunmen reported on roof of Taj Majal throwing grenades. Soldiers rushed into Oberoi Hotel (just now).
The attackers were armed with assault rifles and grenades. Live coverage at the time of this writing indicates that four hours after the start of the attack, there is still terrorist activity. The attacks began about 2230 Mumbai local time (1700 GMT).
According to multiple news sources, gun battles are still taking place at the two above hotels in Mumbai, and some people are trapped, besides the hostages. There is no word of continue terrorist activity at the other locations.
The hotels which have been attacked are the Hotel Oberoi and the Taj Mahal Hotel.
CNN TV reports that 3 policemen have been killed, 2 terrorists have been killed. According to IBN, among the dead is the head of the Maharashtra state's anti-terror squad, who apparently died gun battles after the attack.
Current casualty tolls are 80 dead, 250 injured.
A claim of resposibility has been made via email by a group called Dekhan Hujahedin. As indicated by multiple sources, the use of assault rifles and grenades rather than IEDs is different.
This story will be updated as events continue.