The virus is a variant of the social networking virus Koobface. The virus is spread by sending fake messages around Facebook accounts. The message looks like this (photo credits to McAfee):
If a user ends up following that link, they are taken to a site with a flash video player. The virus then alerts the user that their Flash software is out of date. The virus than prompts the user to download the latest version, and if the user accepts, it downloads the virus onto their computer. Finally, the user receives an error message once the virus is installed saying there was a problem installing their Flash update.
Facebook is aware of the problem, and asks users who have received the virus message to reset their password and scan their computers for the virus.