Malicious Flashback Trojan

Never give out your administrator password unless you manually initiated the action. If you get a pop-up asking to update flash, dismiss it, and manually verify your version at: http://www.adobe.com/software/flash/about/

and, if necessary, update it at: http://get.adobe.com/flashplayer/

Unfortunately, the standard behaviour of Flash Player and many other types of auto-update programs makes them impossible to distinguish from malware. This will be fixed in Mountain Lion with Gatekeeper. You will be able to restrict your machine to getting software only from the Mac App Store.

To check if you have malware, try the following...

In Terminal.app, run:

cat ~/.MacOSX/environment.plist

and

codesign -v /Applications/Safari.app

If you get anything about "DYLD_INSERT_LIBRARIES" on the first and/or "code or signagure modified" on the second, then you are infected. Any other responses (including none) means you're fine.

A lot has happened since April 6. There is one more place you need to check.

In Terminal.app, run:

find ~/Library/LaunchAgents -type f -exec defaults read {} ProgramArguments \;

There will be some files in there. That's normal.

Chances are you will be fine. Everything you have reported so far sounds normal.

A lot has happened since yesterday. Apple has released another Java update that includes a fix and will help prevent similar issues in the future. Just run Software Update.