The original iteration of the Flashback Trojan was a nasty little bugger, quietly shipping your Mac’s details off to a remote server. This newly discovered variant is even worse.
The new version, dubbed Flashback.C, also disables the your Apple’s security definition update service by wiping files necessary to run future updates. Both Snow Leopard and Lion are vulnerable, though the Trojan seems to delete itself on any system running Little Snitch. The Trojan itself comes disguised as a Flash package installer.
F-Secure offers removal instructions here, Little Snitch is available here. [F-Secure via Mac World]
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