I also receive this same warning (Trojan.Win32.TDSS.bjam) in the installer file (vlc-1.1.1-win32.exe) which has been downloaded by the VLC auto update.
When downloading and installing VLC 1.1.1 yesterday (2010-07-21), I didn't receive a warning. This is probably due to a signature update issued today (2010-07-22) which contains the new signature:
http://www.securelist.com/en/descriptio ... .TDSS.bjam (Kaspersky's Malware Info Site).
However, I'm not sure whether this is just a false-positive or new malware which has recently started to spread which might have infected the VLC 1.1.1 installer (on some download locations?).
Thanks for your reply. Yes, it does seem that Kaspersky only added the signature for Trojan.Win32.TDSS.bjam yesterday, which would explain why the file wasn't flagged when you downloaded it yesterday, but was flagged when you downloaded it today.
I am wondering if other virus scanners will also start producing warnings as more of them add signatures for Trojan.Win32.TDSS.bjam over the coming few days. As you can see from the results I posted earlier, 3 virus scanners already report the file as infected, and a 4th (Symantec File Insight) flags it as "suspicious" without actually claiming a virus.
I looked up Trojan.Win32.TDSS.bjam on Google, and apparently it is a rootkit. This might explain why it's so hard to detect and is being missed by other virus scanners.
I think this is a critical issue that needs to be addressed by the VideoLAN people as soon as possible. Spreading a nasty rootkit like that to millions of people is extremely irresponsible behavior. And if these are false flags and the file is not infected, then we need to hear from them on the issue. They should explicitly state that the file is free of malware and that the warnings from various antivirus software are all wrong.