I had this exact problem last week... However, it was NOT due to any virus, or other malware.
Two things lead me to believe it is a virus.
1. Saw Win32downloader.gen on Spybot scan.
2. Acts as I seen described on Internet sites.
Four things lead me to believe it is NOT a virus.
1. Win32downloader.gen has disappeared from Spybot scan. I have read that it will reappear but hasn't.
2. Have seen no other activity other than the download thing.
3. Have checked files and registry keys described various places and can find nothing.
4. At the end of "download is virus" warning, the LEARN MORE link leads to a Microsoft help site telling one how to avoid viruses.
WayneLee,
Does #4 sound like happened to yours.
This whole thing looks to me more like a Microsoft message than virus.
If it is, it is still a PIA!!