Hmmm, none of those happened to me!? Could it be the case with people in IN? lol just kidding!

But seriously, my browser and cookie settings in IE (sp1) didn't change as far as I can see but you are right MS VM Java permissions was set to 'Medium Safety' but was changed to 'High Safety' (if I am not mistaken cause I always lower it to Medium for certain sites' functionality).
None of the cookies are automatically selected by default when you scan with Spybot, they come up as green/blue opposed to red (bad) entries.
It is changing for more secure settings at least but you are right, if it did indeed change all those settings it should have informed you either beforehand or afterwards.

Anyhow, I did run the update and also opt to download and install the beta updates as well which caused the program to update itself and then instead of restarting itseld, it just closed itself so I had to manually restart the application once, following sessions were fine.

I also had to do the few tweakings/configurations I mentioned on my Spybot post (link given in my first post) so the scans would be more complete, etc.

I will take a closer look on my test system to see what exactly it does but my gaming system got hit by a nasty spware (can you believe I didn't have any protection on it yet since it was a fresh install).

After the fresh install, I installed a few of my usual apps then started installing a few games I am currently re-playing. Afterwards, I wanted to search the web to find and download any available updates. When I installed the file downloader of a reputable game site to have it download a game update, it also started running the game patch after the download but I did notice a few quick flashes on my screen which was peculiar indeed.

Needless to say i got owned! I really didn't see it coming (you can never be too certain or careful, huh?). I really didn't have anything to lose other than an hour or so I spent customizing and installing the games but my old Spyware Hunter spirit kicked into overdrive and I took a deep breat and started fixing it....if you care to know more let me know and I will share all the info I could gather.

One good thing that came out of this though, I realized how ineffective some of the so called 'specialized' tools that are available out there (SmitFraudFix and VirtumundoBeGone to name some) but more importantly I noticed a few system folders getting infected in a new way that I never seen before!
I was using my own tools AnalyzerXP and CleanupXP+ most of the time (I feel like a proud parent) but I noticed a few shortcomings of both programs and got new ideas to improve them in a big way (I am hoping)!