I just read one of the other threads about Microsoft losing t-mobiles sidekick backups and I began to wonder. What would happen if a virus managed to get into and attack a cloud? Is that possible..?

Your run of the mill virus, even if it affects a guest operating system hosted on a "cloud", will not be able to impact anything other than that guest.

Given how much different systems "talk to" each other in order to coordinate important functionality like failover and live-migration, though, it definitely seems possible that a highly-sophisticated attack could be devised to bring down an entire "cloud" in one fell swoop.

Fortunately, there are some pretty big brains working on defending against these types of attacks. Unfortunately, there are equally intelligent people on the other side of the issue.

In reality, the level of risk should end up being about the same as the level of risk inherent to any peice of software. The "cloud" community will see security updates, patches, and the occasional exploit.

most hosting is going to be cloud in the future if you ask me. i think shared hosting is going to be a thing of the past with vps so cheap now. but when clouds do go down i hear it's a complete headache. i was just reading what a host had to go through when one of their clouds went down with thousands of clients on it. ironic, when clouds in essence are suppose to be disaster proof with all the redundancy.

Virtual Clouds introduce an entire new set of issues and vulnerabilities. They are not PCI compliant and any sensitive information should not be stored on them. Here's an interesting paper on the subject.

http://people.csail.mit.edu/tromer/papers/cloudsec.pdf

It is very much depends of the Cloud platform and the type of infrastructure. It is impossible to say what would happen. I don't think how does the Microsoft cloud platform work, but I don't think it will be different from the way a standard Windows powered system acts when it is harmed by a virus.

Virtual Clouds introduce an entire new set of issues and vulnerabilities. They are not PCI compliant and any sensitive information should not be stored on them. Here's an interesting paper on the subject.

http://people.csail.mit.edu/tromer/papers/cloudsec.pdf

The researchers in that paper come out and explicitly say that there are significant practical challenges to actually achieving the theoretical exploits they are discussing.

I don't deny that there are some risks inherent to virtualization, but let's not get carried away and over-state the issue.