This looks to be a bad one folks. If you want to stop visiting sites with graphics in them and disable all images in e-mail you will likely be safe. Otherwise get your virus protection and Spyware applications up to date.
“Microsoft is investigating new public reports of targeted attacks exploiting a vulnerability in the way Microsoft Windows handles animated cursor (.ani) files. In order for this attack to be carried out, a user must either visit a Web site that contains a Web page that is used to exploit the vulnerability or view a specially crafted e-mail message or email attachment sent to them by an attacker.”
See the Microsoft Advisory