Approximately 60 minutes after launch, the second stage of the Falcon rocket produced the following spectacular results.
As anyone who watched the launch will recall, the second stage began a slow roll as it approached the end of its burn into orbit. There was additional unburned fuel aboard, which can be used on future flights to raise the orbit, change inclination and perform other maneuvers.
It seems that this fuel was being vented while the rocket passed over Australia, and the spiral pattern was created as the rocket continued its slow roll.
Of course, this has proven a field day for uninformed UFO enthusiasts, and the media went straight to them for something sensational to sell before checking with Space-X or others who might have a real clue what was going on.
Phil Plait, over at Bad Astronomy, has more information on the media frenzy and what really happened.