Hood - It sounds like the initial attack was BEFORE that patch was out from MS. And hell, even TODAY they're finding more buffer-overflow problems. MS products are chock-full of 'em. Every one is an open door for hackers.
There isn't ANYTHING a Sys. Admin or tech guru can do - MS has the code to its products, so there's no way anyone BUT MS can close off these overflow issues. The Valve Sys. Admin. is in hot water to be sure - but there probably was nothing he could do to stop it. Whoever did this was very determined and very methodical, if they crafted something to target Valve & Gabe in particular.
Anyone who laughs about this is an idiot. These guys make these games because they enjoy it. They've worked on this stuff for 5 years. If *YOU* suddenly had 5 YEARS of work destroyed in one moment, you'd be pretty f'ing upset.
The human-aspect aside, I'd also guess this is 15 - 30 MILLION dollars in losses, in terms of man-hours at Valve, and licensing fees they COULD have gotten from 3rd party developers (that may now get the engine code for "free").
I seriously hope whoever did this is brought to trial and gets sent to "Federal Pound Me In The Ass Prison", to quote Office Space...
It'd be nice if we could all play games for free; but saving $40 isn't worth ruining the lives of 30 or 40 people... especially not if they're the ones you WANT to be making games!
Besides, any knucklehead out there that thinks this will let them play for free is not thinking straight: the engine code doesn't include artwork, levels, models, etc... So its useless for scamming a free copy of the game. Cheating online is another matter; and like the previous poster, I forsee that being a HUGE issue in the future. *sigh*
--Noel "HB" Wade