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It promised earlier this week that a fix was coming, and Apple has now delivered a Java security update that is says removes "the most common variants of the Flashback malware."



From Engadget:
That update also reconfigures the Java web plug-in to disable the automatic execution of Java applets by default (in Lion, at least -- those still on Snow Leopard are advised to do that themselves), although folks can re-enable that functionality if they choose.
  Apple releases fix for Flashback malware