Flame (aka Flame aka Skywiper) is a massive, complex piece of malware, used for information gathering and espionage.
The malware is most likely created by a Western intelligence agency or military. It has infected computers in Iran, Lebanon, Syria, Sudan and elsewhere.
There seems to be a clear difference in how online espionage is done from China and how it's done from the West. Chinese actors prefer attacks targeted via spoofed e-mails with booby-trapped documents attached. Western actors seem to avoid e-mail and instead use USB sticks or targeted break-ins to gain access.
The worst part of Flame? It has been spreading for years.
Stuxnet, Duqu and Flame are all examples of cases where we — the antivirus industry — have failed. All of these cases were spreading undetected for extended periods of time.