Is there a security concern exposing NTLM authentication over http or should it only be https?

We are setting up a SharePoint 2010 site. Don't worry, this is not a Sharepoint question, just adding it for context. Most of the site will be anonymous, but some users are able to authenticate in and edit content. They use NTLM (users exist in AD). Is there any concern about exposing NTLM login for users that can modify content over the internet via http or should that only be exposed via https?

NTLM over plain HTTP is insecure. Attackers that passively sniff traffic or who perform a man-in-the-middle attack can use various methods to steal or abuse credentials. For example:

• NTLM relay attacks: when a user thinks they are authenticated to SharePoint, the attacker can instead forward the NTLM challenge of some other service (like Outlook/Exchange or an SMB share) in the domain, and gain access to that as well. Even when the second service is using HTTPS!
• Offline dictionary attacks: after observing an NTLM challenge and response, an attacker can recompute the exchange for some password P. When it matches, it means P was the user password. The attacker can keep trying P's until the password is found. The effectiveness of this attack depends on password strength, but by using standard tools, a good dictionary and stone GPU acceleration, even moderately complex passwords can be cracked.
• Session hijacking: an attacker who is just interested in SharePoint can also simply ignore the NTLM exchange and take over the users' SharePoint session (e.g. by stealing cookies or injecting JavaScript). This gives them the same read/write access as the user.
• Website spoofing: am attacker can show a fake login screen asking for AD credentials. Since users probably trust SharePoint, it's not unlikely they would fill them in and thus provide the attacker with a plaintext password.
• NTLMv1 downgrade: depending on the client configuration, an attacker may be able to get them to perform an NTLMv1 handshake. This has all the cryptographic weaknesses of NTLMv2 (i.e. vulnerability to dictionary and relay attacks) but after cracking a two DES keys (pretty cheap and fast nowadays) it gives them access to the users' raw NT hash. A dictionary attack against this is far more efficient. Furthermore, this value can be used for a pass-the-hash attack, allowing the attacker to log in as the user (against most services) without a password.

Bottom line: treat NTLM authentication the same as authentication with plaintext credentials. In this case, this means you should use HTTPS of you want to protect against attackers on your network.

You won't be exposing credentials in cleartext using NTLM over HTTP. You will be exposing everything else, so your data won't be secure from confidentiality or integrity breaches (eavesdropping or modification of the data "in flight").