I first became aware of this cup a couple of weeks ago, via an article in Der Spiegel (which is also the source of this photo) - Heiliger Gral vom Nil - which was rather unfortunately titled, as it's not the cup used by Jesus at the Last Supper, so it's not the 'holy grail'.
A few specialised blogs picked up on the news, and are highly skeptical about it - the consensus seems to be that the inscription is late if not an outright fake. Tom Elliot of Current Epigraphy had an open thread on the cup here. Antonio Lombatti is another skeptic when it comes to this cup, and thinks it's too perfect. They clarify the inscription in the post. Ancient words were often written joined up, so this:
ΔΙΑΧΡΗΣΤΟΥΟΓΟΙΣΤΑΙΣis broken up into these words:
DIA CHRESTOU OGOISTAISWhich in turn translates as “Magician through Christ” or "for Christ the Magician" - a phrase which is far more open to interpretation than people assume, even if it is genuine. Christ means generally means Messiah, and it would only refer to Jesus if it could be shown to have been owned by a Greek-speaking Christian - not a Jew. It could possibly be a given name, however, and indicate the owner of the cup. The 'magician' bit is also troubling - if the inscription is original, and if the owner was Christian ... what could he have meant by it? Did he believe Jesus performed magic?
The cup was apparently found by Franck Goddio's team in Alexandria, although as others have pointed out it was not mentioned amongst this year's finds on their web site. News of it broke when it was announced that it was going on loan to an exhibition in Madrid of Egypt's Sunken Treasures. Then El Mundo picked up on it - La vasija de 'Cristo, el mago' (with video).
Tom Elliot has set up a running bibliography, with articles in various languages.
I've been ignoring the cup for the simple reason that I have no idea what to say about it. St Paul's earliest letter is dated to AD 51, and the claims are that this cup is earlier - making it the first reference to Christ ... but we have not been offered any proof of the date. The truth is that until we know more about the context in which the cup was found we can't even begin to debate it's meaning. The cup has now however made the English-speaking media.
Earliest Reference Describes Christ as 'Magician' - Discovery News:
The general trend in the Discovery News article seems to be that it was used in soothsaying by a magus. But I shall leave the last word to the great Prof. RRR Smith:
Bert Smith, a professor of classical archaeology and art at Oxford University, suggests the engraving might be a dedication, or present, made by a certain "Chrestos" belonging to a possible religious association called Ogoistais.