I can tell you from working in a public school as an on-site tech adviser that the spyware/malware/adware world is alive and well.
Scanning and prevention tools can help a lot, but we still run into problems every once in awhile. One student picked up a virus-infected screensaver and other neat malware simply by looking for free music.
Legal action must be taken. Dealing with so much of this stuff in people's homes and at work, the Internet is clearly becoming more dangerous for consumers and businesses. I'm waiting for the day my toilet throws an ad at me. As long as there is money to be made, there will be those who do tasteless things on the Internet.
Quinton T. Mosley