Well, this is the story we got from Norton Anti-Virus (another division of my company). I can't find the announcement on the website, but this is what they told us:
AOL4Free was originally a hoax, a slightly more plausible version of the Good Times hoax. (Good Times was supposed to be a real virus; AOL4Free was supposed to be a Trojan horse.) Then, after all the major anti-virus vendors had issued announcements that it was a hoax, some bright boy got the idea to make a real one.
You can't get a virus just by reading email -- unless you have an oh-so-clever mail reader that automatically opens attachments. AOL does this (or used to) by default. So if you haven't turned that off, and you're running the target platform (PC/Mac/whatever), you could get bitten.
Moral: Don't let your software do what you should do yourself, and never run a program unless you know what it does.
-E