I just had a horrible realisation that people on Steam and now xfire, which could spread to other IMs have got a student virus. It's starting to spread like wildfire, so I need everyone just to be a little careful. I'll post a full post from a clansite since it's not just my clan, Warrior Nation that has been having this problem:

From WNxPinkShadow:
For those who do not know this yet, there is a virus spreading himself through Xfire.

Someone who is infested messages you with this message:

hi can you help me out with my school project?the teacher told us to make a program in VB 2008 to check our school website students ,and give them notes by the program without needing to go to the website can you help me out?i made the program but i need testers can i send you so you can test? when you launch program click button New Student,put random name and note and i will check our school website if it appears

Please do NOT accept! It sends you a malware program! You'll lose your xfire account and email account, maybe more.

If you get this message just close the window.

If you message an infected person you'll get this message:

dude dont accept any file from me im infected

EDIT: This goes through steam as well! Be careful!

Another person has posted more info about that steam virus:

[15:12] jeherλ: people will send you invites to get free games
[15:12] jeherλ: which apperantly would be steam give-away's
[15:13] jeherλ: they link you to a " whats supposed to look an official steam site"
[15:13] jeherλ: and it requires logging in
[15:13] jeherλ: might wanna add to avoid those
[15:13] jeherλ: they are not official steam websites and the login is encrypted with keylogging software

Please spread the word! Let everyone know about this!

So whatever you do, DO NOT CLICK ON ANY DOWNLOAD OR LINK FROM INFECTED PEOPLE. You risk losing your steam games, or worse...

UPDATE:Turns out it's starting to happen on MSN as well now... to avoid embarrassment I've got an almost safe way to avoid this:

1. Turn off or disable File Transfer on xfire, steam and other IMs. If you can't, do not accept any link from your friends if he's talking about working on VB2008. It's most likely malware. If all else fails, remove the infected friends, even if it means blocking them temporarily
2. The same is true with Phishing. Do not use links outside of Steam's application. If you use credentials on non-trustworthy sites even if it says Steam on it you're more likely than not going to lose your games, account details, and the worst case scenario with xfire/IMs, your operating system.

If all else fails, go to safe mode, disable the internet and backup ALL your files prior to rebuilding the OS you was using. Back up using DVD-Rs, Blu-rays or hard drives, and some USB sticks ensures you keep the files. I really hope no-one has to do that, but it's best to be safe than sorry