jtara - 3:26 am on Apr 26, 2007 (gmt 0)

Am I understanding this properly when I assume that computers can get infected with this simply by clicking an AdSense ad that belongs to one of these hijacked accounts?

Yes.

Note that it doesn't have to be an Adsense ad. It could be an ad appearing in Google search, which would be more highly trusted by consumers than an Adsense ad appearing on a website.

The exploit appears to target those using an UNPATCHED MDAC component. This is addressed by Microsoft Security Bulletin MS06-014:

[microsoft.com...]

Note that the security bulletin is a year old.

Here's an excerpt from the above bulletin:

What is the scope of the vulnerability? This is a remote code execution vulnerability. An attacker who successfully exploited this vulnerability could remotely take complete control of an affected system. If a user is logged on with administrative user rights, an attacker who successfully exploited this vulnerability could take complete control of an affected system. An attacker could then install programs; view, change, or delete data; or create new accounts with full user rights. Users whose accounts are configured to have fewer user rights on the system could be less impacted than users who operate with administrative user rights. What causes the vulnerability? Under certain conditions, the RDS.Dataspace ActiveX control fails to ensure that it interacts safely when it is hosted on a Web page.

What makes this attack particularly scary is that it is using a vector - Adwords - which is highly trusted by consumers. Further, they appear to be targeting ads for highly trusted websites. You'd usually expect this sort of attack when accessing sketchy websites.