What's that smell? It's the worst thing I've ever smelled in the world!

From WormWiki

That's anaerobic bacteria, bacteria that thrive in situations without oxygen. If you have a large pocket, take it out and dump it. If you have a small, newer pocket, spread it out on new bedding so the air gets to it and the good bacteria will be able to take over.

To prevent this, make sure your bedding is fairly 'fluffy' (lots of air pockets), that there is good drainage and the holes are open so air can get in the bottom of the bin too, and that there aren't any large masses of vegetable matter all stuck together in one place. Especially if you have a plastic bin, the more air holes the better (sides and bottom).

If your bin smells slightly off (but not horrid enough to make you vomit), you may be headed towards anaerobic territory. Add some fluffy bedding (shredded cardboard or newspaper for example) and spread the food out. Your bin should smell like fresh dirt.