Malware

The malware is most likely a Windows problem, not a Mac's. There are currently no known Mac viruses. Note that when using Windows that Windows is just as vulnerable as an actual Windows PC.

Helpful Links Regarding Malware Protection

An excellent link to read is Tom Reed's Mac Malware Guide.

Also, visit The XLab FAQs and read Detecting and avoiding malware and spyware.

See these Apple articles:

Mac OS X Snow Leopard and malware detection

OS X Lion- Protect your Mac from malware

OS X Mountain Lion- Protect your Mac from malware

About file quarantine in OS X

If you require anti-virus protection I recommend using VirusBarrier Express 1.1.6 or Dr.Web Light both from the App Store. They're both free, and since they're from the App Store, they won't destabilize the system. (Thank you to Thomas Reed for these recommendations.)

You can always find options:

You may purchase Office 2011 - Mactopia - or you can try the freeware suite, Libre Office, that is functionally similar to Office 2007 for Windows except it works on Lion/Mountain Lion.

You may want to consider as well:

These two suites are similar to Libre Office but not as current or as well-supported:

NeoOffice

Open Office

Note that there's no reason to abandon Microsoft Office over this. I personally prefer Pages and Numbers, but that's not a choice that makes much sense for some people.

Regarding the malware, I'm sure that, as Kappy says, it's Windows malware. But just to be sure, what is the name that Norton and Avast call it? Not the file name, but the name of the malware.

Also, note that Norton is not very good at detecting Mac malware, and is well known for bringing a healthy Mac to its knees. You should definitely remove it. The uninstaller is part of the installer, so if you no longer have the installer, you will need to re-download it from Symantec's web site.