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I know that NTFS has features called ADS which may be used to hide malware. So does antivirus/security software, such as Norton 360, protect against this type of attack?

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FYI: NTFS isn't the only file system that will do this. See Wikipedia for more info. – Iszi Jul 6 '12 at 12:41

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Symantec says yes for at least two version of their Entreprise products:

Problem

Can the Symantec Endpoint Protection (SEP) product scan and detect virus or other malware stored within NTFS Alternate Data Streams?

Solution

Yes, Symantec Endpoint Protection 11.0 and 12.1 is able to scan and detect threats within NTFS Alternate Data Streams (ADS).
Realtime Protection or File System Auto-Protect can scan within Alternate Data Streams associated with both files and folders.

Source: http://www.symantec.com/business/support/index?page=content&id=TECH173434

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I would hope this feature is in every version of their security system. – Ramhound Jul 6 '12 at 14:50
I would hope MS (and Apple) embrace the unix way "Everything is a file", we would gain in compatibility. – Shadok Jul 10 '12 at 14:22

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