Whilst virus and malware are know to exist, you are quite right Steve. Due to how Linux works, with it's permissions systems and hierarchy it's quite hard to directly hack, so malware is too much hassle compared to Windows. Equally because everything normally needs to be compiled before installing due to the vast number of different distributions and builds, it again makes it very hard to develop a standard virus that would work for all versions.

The reason Windows is so prone is actually because it is so user friendly. Consider the Microsoft have made it possible for a lot of code as far back as Windows 3.1 to continue running even under Windows 7, which is quite impressive, and so really does offer the user a good environment to run their code, but also allows virus and malware writers the knowledge that the whole userbase can also run their malicious code.

Linus will never become a standard desktop OS for the home user purely because of this, and IMO Windows will continue to, attracting the same annoying security issues.

Now take Mac OS X. Why hasn't that attracted the same level as Windows? It is a fixed OS much like Windows. All copies of the same version are the same and will run the same code. And pretty much all versions of OS X are compatible to run the same code. Some does exist, but it is more the smaller userbase and how the OS is used that I think limited the interest, more than being able to.