Did I put a hole in my Trend Micro security wall?

Summary:
I used TM’s “Always Ignore� option on some malicious website names found in
my HOSTS file. Will this disable the search for these names elsewhere when
they could be a real threat?

Reference: Posting by “Vista Novice� (me) on 11/7/2007 12:19 PM PST “Is
Spybot adding rather than removing spyware?�

Details:
As a followup to my Nov 11 posting at this site (hats off to Mark Veldhuis
for the answer) I have another related security concern. Since Spybot posts
malicious website names to the HOSTS file which Trend Micro then incorrectly
tags as Trojans and Adware I “solved� this problem by clicking the “Always
Ignore� rather than the “Remove� or “Always Remove� option provided by the
Trend Micro Security software after its scan. ie. under the “Suspected
Spyware� tab in the “Complete Scan� window. Since then it has stopped
reporting these red-herrings.

At the time I assumed I was only “always ignoring� those references in the
HOSTS file and that Trend Micro would continue to check for these spyware
references in executable files and other locations on my disk. However, not
knowing the inner workings of the Trend Micro Internet Security software, it
now occurs to me that these malicious website references may be being
“ignored� everywhere, not just in the HOSTS file.

Does anyone know the answer to this? Have I inadvertently opened a breach
in my security wall?

[Note: I must say that I was made nervous by a Vista “window freeze� at the
very moment I was viewing my bank statement on my bank’s website today.
Vista had apparently locked up, which had never happened to me before. “Why
does this suddenly happen when I’m viewing my bank statement?“, I thought. I
yanked out the plug to my Ethernet connection (as suggested by my ISP support
guru if I ever thought I was under attack) and did a cold Vista restart. But
that’s what prompted me to post this question now, although I have been
wondering about it for awhile.]

Mea culpa: If there is an already posted answer to this question which I
missed I apologize - please point me to it and keep in mind that I am new to
this game. I did search this Security site for “Trend Micro� and read
through all 20 posted questions and at least the responses check marked as
“answers� before posting this. I did not see an answer to this question but
it made for very interesting reading.

As always, thanks for the help.

Charlie (Vista Novice)

P.S. On a related note I have been using the Vista feature whereby it
remembers website login passwords for you. Is this a good idea given that
this stores them somewhere on your computer disk that Microsoft and/or
hackers would be aware of and potentially have access to? What is the
opinion of security experts on storing passwords in machine readable form on
your computer in this way rather than only externally off-line or in your
head? Does Vista somehow encrypt them or otherwise protect them from access?

Addendum:

As I read through the postings at this site on the Security topics to see if
an answer to my Trend Micro security “hole� question had already been posted
I found a lot of interesting and useful security software information.
However, as a Vista novice, some items of information which I did not see
which I thought might interest other novices like me were:

1. The September 2007 issue of Consumer Reports (CR) has an article rating
security software and providing a lot of useful information for novices in
this area. For those who don’t know CR is completely objective and has
always refused to accept payments from advertisers either of money or
products and services (ie.they have buyers who buy the products and services
in the normal retail market). This is a huge financial sacrifice for a
magazine publisher but gives them the moral high ground in the claim of
objectivity.

2. Per CR, the advantage of a security software suite like Trend Micro
Internet Security that includes everything is that it gets you up and
running for a reasonable price without needing to research, download, and
manage individual products for Anti-virus, Anti-spyware, Anti-spamware,
Ad/Popup Blockers, Antiphishing, etc. (And you experts sometimes forget that
at least initially us novices don’t even know what any of these things are!
At least I didn’t.)

3. All computers which come with preinstalled Vista also come with a free 30
or 60 day trial of some vendor’s security software which you can use for
free. This gives you internet security while you go online to find something
better, eg. the HP laptop I first got at Cosco and later returned came with
Norton security software. The Gateway desktop and laptop I later got (at
Best Buy including a printer/scanner/copier for the same price as that HP
laptop) came with McAfee security software.

4. Per CR, the license to Trend Micro includes use on three computers while
other vendors just provide a one-seat license. This was important to me when
I got the two computers - did I mention I got both for the same price as the
one HP laptop I returned? ;-)

5. While the TM software was priced at $50 at Best Buy (the same price paid
by CR), I got it on-line for $21 (full license, full TM technical support)
and with free shipping. I just Googled “cheap Trend Micro Internet
Security�. At that time Royal Distribution, Inc. in Lousville, CO was the
low bidder. Once you find the cheapest supplier be sure to Goggle that
supplier’s name with “rating� or “review� to find out customer experience
(ie. with speed of delivery, handling of problems, phone support, etc.).

--
Charlie, the Vista Novice