Graham Priest discusses The Liar's Paradox for a NY Times blog. It seems that one way of solving the Liar's Paradox is defining dialethei, a true contradiction. Less Wrong, can you do what modern philosophers have failed to do and solve or successfully dissolve the Liar's Paradox? This doesn't seem nearly as hard as solving free will.
This post is a practice problem for what may become a sequence on unsolved problems in philosophy.
See also: A Universal Approach to Self-Referential Paradoxes, Incompleteness and Fixed Points, which treats the Liar's paradox as an instance of a generalization of Cantor's theorem (no onto mapping from N->2^N).
I'm not sure if I like this paper (it seems to be trying to do too much), but it did contain something new to me - Yablo's non-self-referential version of the Liar Paradox: for every natural number n, let S(n) be the statement that for all m>n S(m) is false. Also there is a funny non-self-referential formulation by Quine: “Yields falsehood when preceded by its quotation” yields falsehood when preceded by its quotation.