But, how does this work? Does Windows source all of the files in your %SystemRoot%\system32\drivers\etc? Why does it matter what the file is named? To hide from idiots?
It seems like it would only work for hiding from people casually checking. Personally I'd open the file by typing the path myself, so I'd end up finding the trojan's file. The same would be true for any automated anti-spyware tool.
So yes, this looks like it would only affect a very limited number of people - technical enough to check the hosts file, but naive enough to do it manually and not notice the other hidden file.
attrib +h
at the cmd prompt, the file properties in explorer would have a checkbox for this tooMaybe because of the Control Panel revamp, or the fact that the menu-bar is hidden by default in Explorer windows?
I'm not sure which will look dumber as a consequence of this post: me or the Windows 7 UI.