However, every now and then one slips through the cracks.  That appears to be the case with a flaw in the Virtual DOS Machine (or VDM), which was used to support 16-bit applications.  The flaw in the VDM could allow a user to alter the kernel stack of processes, allowing them to run code with system level privileges.  Thus the attack falls in the "elevation of privilege" (EOP) attacks class.

The flaw has been around since the release of Windows NT 3.1 in 1993.  It continues to exist in all 32-bit versions of Windows to date.  It does not exist in 64-bit versions of Window.  Surprisingly, Microsoft claims that there have been no known attacks in the wild exploiting the flaw. 

After being called out by some security blogs, Microsoft has now issued a security advisory -- Microsoft Security Advisory (979682) -- on the topic.  It says it is working on a patch or update to fix the problem.

Jerry Bryant, Microsoft Security Program Manager confirmed the relative straightforward steps it would take to exploit the flaw for malicious use, writing:

To exploit this vulnerability, an attacker must already have valid logon credentials and be able to log on to a system locally, meaning they must already have an account on the system. An attacker could then elevate their privileges to the administrative level and run programs of their choice on the system.

Until the problem is fixed, Microsoft recommends customers who do not need the NT Virtual DOS Mode (NTVDM) or support for 16-bit applications disable the NTVDM subsystem, blocking any potential attacks.  Detailed instructions about how to do this can be found on the previously linked security advisory.

Most of the security attention surrounding Microsoft has been recently focused on a major hole in Internet Explorer, which allowed Chinese cyber attackers to steal data from Google, Adobe and others.