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About Win32.Worm.Downadup and its removal

Win32.Worm.Downadup is, as its name suggests, a worm which spreads by exploiting a vulnerability in the Windows RPC Server Service. Having all Windows systems, except Windows 7 Beta, at its disposal, plus a highly optimized code the e-threat is spreading with incredible speed.
The estimated number of infected PCs is at 500.000 and rising. Considering the fact that it first appeared in late November 2008 and that Microsoft issued a patch for this vulnerability on the 23rd October 2008 several questions arise:
1.    How come so many systems are still vulnerable to the worm?
2.    Is this the beginning of a new botnet?
 
To answer the first question: it seems people fail to see the importance of system patches, especially the ones rated with a