This attack occurs because
The developers of this install are using the Java Runtime Environment, the initial installer taking the form of a Java applet rather than an Active X component inherent to IE alone. In this way, if the browser being used can recognize and install the applet, then it doesn't seem to matter what browser you're using, or (more worryingly) how tight your IE security is.
I would recommend reading paperghost's article at the above link for the full story and don't forget to read the comments posted in response to it.
Here is a link to spywareinfo's newsletter where some people who appear to be in denial of the true meaning of this issue are basically slamming paperghost.
It is rather disheartening that some parts of the Mozilla/Firefox community are resorting to such tactics as you see in the spywareinfo article and some of the comments in response to the original blog, but it is unfortunately understandable given the well known human trait to shoot the messenger while denying the obvious. Right now that messenger appears to be paperghost.
Here are links to his response to this article at both Vital Security and Spywareinfo:
I am writing this to tell paperghost that he is doing a good job, some of us understand what is going on, keep a stiff upper lip and the truth will win out in the end.
By the way, sorry to steal your title but it does catch the eye like a good article's title should.