Two teenagers were arrested Saturday in the theft of a laptop and hard drive containing sensitive data on up to 26.5 million veterans and military personnel, authorities said. The government-owned equipment was stolen May 3 during a burglary at the Maryland home of a Veterans Affairs employee. The laptop and hard drive were turned into the FBI June 28 by an unidentified person in response to a $50,000 reward offer. The equipment contained the names, Social Security numbers and birth dates of veterans discharged since 1975, in what was the worst-ever breach of government data.

Cyber-thieves who hacked into the ATM information of at least 800 retail customers in California and Oregon have stolen as much as $700,000 from personal accounts during the last two months, according to police reports. People who used ATM cards to purchase items at Dollar Tree in Modesto and Carmichael, CA, and Ashland, OR, have turned in reports of unauthorized withdrawals in the computer-based scam. Federal and local investigators would not discuss with eWEEK how the thieves stole the information.

Ben Fathi slipped into the darkened, standing-room-only conference room and took a seat on the carpeted floor. On the Black Hat stage, malware researcher Joanna Rutkowska, of COSEINC, was discussing a new technique that could plant an offensive rootkit in Windows Vista, Microsoft’s "most secure ever" operating system. As corporate vice president for Microsoft’s STU (Security Technology Unit), it is Fathi’s responsibility to deliver on Vista’s security promise, and Rutkowska’s claim–complete with live demo–that a key anti-rootkit feature can be easily defeated could be a public relations nightmare.

When encountering legal or regulatory action, technology managers who fail to get corporate data fast or vouch for its completeness can cost their companies millions of dollars. Learn what happened to WestLB, an investment bank, when it had to exhume 650,000 email messages and documents after it was hit with a sex discrimination lawsuit.

A company has defended its decision to sack one of its staff by text message, claiming it was keeping in touch with youth culture. Katy Tanner, a 21-year-old sales assistant, received the message while she was off work with a migraine. The text message said: "We will not require your services anymore… Thank you for your time with us."

Microsoft plans to issue a dozen security bulletins on August 8 to cover a wide range of security vulnerabilities affecting Windows and Office users. The Redmond, Wash., software maker said that 10 of the 12 bulletins will contain patches for bugs in its flagship Windows operating system. Some of those will be rated "critical," Microsoft’s highest severity rating.

With Microsoft Office 2007’s relatively high price and steep learning curve, free Web-based office suites look mighty appealing. They do offer some interesting features, but should be looked at more as an Office adjunct than a replacement.

Reading blogs via popular RSS or Atom feeds may expose computer users to hacker attacks, a security expert warns. Attackers could insert malicious JavaScript in content that is transferred to subscribers of data feeds that use the popular RSS (Really Simple Syndication) or Atom formats, Bob Auger, a security engineer with Web security company SPI Dynamics, said Thursday in a presentation at the Black Hat security event.

2X has published a guide demonstrating how to implement desktop virtualization within a company at no extra cost. Using VMware server and 2X ThinClientServer, companies can convert existing desktops to thin clients, and have them connect to a virtual machine on one, or more, central VMware servers. This solution is based on 2X ThinClientServer PXES edition, obtainable for free, and VMware server, also available at no cost. The virtual desktop runs Windows XP, and can use the same license already in use by the company.

The first non-beta version of Windows Live Spaces (the blogging platform formerly known as MSN Spaces) is done. LiveSide has posted a useful diagram that illustrates the features (gadgets, search and tagging and Friends Explorer) that will be part of Live Spaces that weren’t part of MSN Spaces.