Just ran MalwareByes and it found and quarantined the following. I can find precious little info on The 'Net. A search of THIS forum produced nothing. Can anyone shed some light on this?

Malwarebytes' Anti-Malware 1.36
Database version: 1946
Windows 5.1.2600 Service Pack 3

4/7/2009 9:00:54 AM
mbam-log-2009-04-07 (09-00-54).txt

Scan type: Full Scan (C:\|D:\|E:\|H:\|I:\|)
Objects scanned: 172006
Time elapsed: 1 hour(s), 29 minute(s), 16 second(s)

Memory Processes Infected: 0
Memory Modules Infected: 0
Registry Keys Infected: 0
Registry Values Infected: 0
Registry Data Items Infected: 0
Folders Infected: 1
Files Infected: 0

Memory Processes Infected:
(No malicious items detected)

Memory Modules Infected:
(No malicious items detected)

Registry Keys Infected:
(No malicious items detected)

Registry Values Infected:
(No malicious items detected)

Registry Data Items Infected:
(No malicious items detected)

Folders Infected:
C:\WINDOWS\system32\NetworkService32 (Worm.Archive) -> Quarantined and deleted successfully.

Files Infected:
(No malicious items detected)

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Hi and no need to panic

The folder has been seen to be created by Tracur.A aka Worm.Nugg which is very aggressively distributed on the P2P networks.

Usually it would hold archives of the worm to be shared via P2P software so it has been given the generic flag of Worm.Archive**

**This flag is used for quite a few P2P worms that create repositories for sharing itself by P2P operations so is not soley the domain of Tracur.a/Nugg but in this case it is.

The folder is created in the system32 directory for concealment(by location,name and hidden attributes) and usually the installed P2P software is modified by the worm to include this folder in its shared parameters.

The folder with no contents by itself represents no risk but is a marker that the worm has either attempted to install and been sucessfully blocked or had been previously installed but since removed from the computer and this folder is just an orphaned object.

Just to put your mind at ease here is what you would see if you had Tracur.A/Nugg active on your pc

Click to view attachment

and here is what MBAM thinks of it

Malwarebytes' Anti-Malware 1.36
Database version: 1954
Windows 5.1.2600 Service Pack 2

09/04/2009 03:50:49
mbam-log-2009-04-09 (03-50-46).txt

Scan type: Quick Scan
Objects scanned: 55420
Time elapsed: 2 minute(s), 42 second(s)

Memory Processes Infected: 0
Memory Modules Infected: 2
Registry Keys Infected: 1
Registry Values Infected: 0
Registry Data Items Infected: 0
Folders Infected: 1
Files Infected: 18

Memory Processes Infected:
(No malicious items detected)

Memory Modules Infected:
C:\WINDOWS\system32\iassam32.dll (Worm.P2P) -> No action taken.
C:\WINDOWS\system32\3.tmp (Worm.P2P) -> No action taken.

Registry Keys Infected:
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows NT\CurrentVersion\Winlogon\Notify\f059b2b4530 (Worm.P2P) -> No action taken.

Registry Values Infected:
(No malicious items detected)

Registry Data Items Infected:
(No malicious items detected)

Folders Infected:
C:\WINDOWS\system32\NetworkService32 (Worm.Archive) -> No action taken.

Files Infected:
C:\WINDOWS\system32\iassam32.dll (Worm.P2P) -> No action taken.
C:\WINDOWS\system32\3.tmp (Worm.P2P) -> No action taken.
C:\WINDOWS\system32\NetworkService32\85.crack.zip (Worm.Archive) -> No action taken.
C:\WINDOWS\system32\NetworkService32\85.crack.zip.kwd (Worm.Archive) -> No action taken.
C:\WINDOWS\system32\NetworkService32\86.keygen.zip (Worm.Archive) -> No action taken.
C:\WINDOWS\system32\NetworkService32\86.keygen.zip.kwd (Worm.Archive) -> No action taken.
C:\WINDOWS\system32\NetworkService32\87.serial.zip (Worm.Archive) -> No action taken.
C:\WINDOWS\system32\NetworkService32\87.serial.zip.kwd (Worm.Archive) -> No action taken.
C:\WINDOWS\system32\NetworkService32\88.setup.zip (Worm.Archive) -> No action taken.
C:\WINDOWS\system32\NetworkService32\88.setup.zip.kwd (Worm.Archive) -> No action taken.
C:\WINDOWS\system32\NetworkService32\89.music.mp3 (Worm.Archive) -> No action taken.
C:\WINDOWS\system32\NetworkService32\89.music.mp3.kwd (Worm.Archive) -> No action taken.
C:\WINDOWS\system32\NetworkService32\90.music.snd (Worm.Archive) -> No action taken.
C:\WINDOWS\system32\NetworkService32\90.music.snd.kwd (Worm.Archive) -> No action taken.
C:\WINDOWS\system32\NetworkService32\91.music.au (Worm.Archive) -> No action taken.
C:\WINDOWS\system32\NetworkService32\91.music.au.kwd (Worm.Archive) -> No action taken.
C:\WINDOWS\system32\NetworkService32\92.VIDEO.WMV (Worm.Archive) -> No action taken.
C:\WINDOWS\system32\NetworkService32\92.video.wmv.kwd (Worm.Archive) -> No action taken.

Thanks very much for a most detailed answer. I appreciate it.