I’m sure you’ve already watched this video. If you haven’t, you should; it gives both the findspot of the recently-publicized Jerusalem Pithos Inscription and the comments of epigrapher Shmuel Ahituv. See also the comments of George Athas, who suggests this inscription might be of the Phoenician script tradition*. The translation of the inscription is uncertain. The dating of this inscription to the late 10th century/early 9th century BC (Low Chronology) is probable due to the complete replacement of the Proto-Canaanite script tradition by the Phoenician script tradition in Cisjordan by the early 9th century BC. The Jerusalem Pithos Inscription is, thus, the oldest alphabetic inscription from Jerusalem.

Now, for the significance of the find:
1. This apparently confirms my original suggestion that the Proto-Canaanite script continued to be used into the late 10th century BC (LC) and that the Izbet Sartah inscription is, therefore, likely 10th century, not 12th century (unless Athas is right and this inscription really does come from the Phoenician script tradition, in which case, my suggestion would be unaffected).
2. This find apparently refutes Israel Finkelstein’s conclusion that the area between the City of David and Temple Mount was uninhabited until the 8th century BC (though we’ll have to wait for his analysis of the excavation report, which certainly will be published sometime within the next five years).
*BTW, there are many noticeable differences between the Phoenician script tradition (Early Byblian Inscriptions, Gezer Calendar, Zayit Inscription) and the Proto-Canaanite script tradition (First Khirbet Qeiyafa Inscription, Izbet Sartah Ostracon, Safi Sherd).

UPDATE: Athas isn’t right and the script really is Proto-Canaanite, so my first point stands.