It will work initially on simple stuff like banner ads and animations and create a mix of HTML, CSS and JavaScript that can be edited, if necessary, in Dreamweaver. It doesn’t support movies or sound yet and it reportedly works best at this point with output from the Webkit-based Safari and Chrome browsers.

The move is expected to result in some developer defections from Adobe, especially among the mobile set.

Although, say, Android supports Flash, Google, Facebook, YouTube and Microsoft, like Apple, all support the immature HTML 5, which is ultimately expected to replace the widely used Flash on the interactive web.

See http://labs.adobe.com/ for a download of the free AIR-based widgetry first demoed last fall. It works on Macs and PCs.

Adobe has also got an audio-enhanced beta of the 10.3 Flash Player and is working on a 64-bit Flash 11.

McAfee, on the other hand, claims a vulnerability in Internet Explorer let the rogues in and absolved Adobe.

CTO George Kurtz says on McAfee’s web site that McAfee told Microsoft about the undisclosed flaw in its browser and that it’s working with companies hit by the attack, dubbed Project Aurora, as well as the government and law enforcement.

Microsoft, in response, initially said, “We recently became aware that a vulnerability in Internet Explorer appears to be one of several attack mechanisms that were used in highly sophisticated and targeted attack against several companies. Our teams are currently working to develop an update and we will take appropriate actions to protect our customers.” It then admitted its compromised widgetry played a role and issued an update. It said using IE in protected mode with security settings at high would limit one’s exposure.

The Adobe vulnerability discovered last month was apparently just fixed. Adobe reportedly had the patch but didn’t want to upset its normal update schedule.

Like Google Adobe reports being attacked. Like Google it termed the intrusion “sophisticated” evidently because of the employees targeted.

On its blog Tuesday the company said, “Adobe became aware on January 2, 2010 of a computer security incident involving a sophisticated, coordinated attack against corporate network systems managed by Adobe and other companies. We are currently in contact with other companies and are investigating the incident. At this time, we have no evidence to indicate that any sensitive information – including customer, financial, employee or any other sensitive data – has been compromised. We anticipate the full investigation will take quite some time to complete. We have and will continue to use information gained from this attack to make infrastructure improvements to enhance security for Adobe, our customers and our partners.”

Adobe sequentially confirmed that the attack it experienced appears connected to the attack on Google. Unlike Adobe, Google said Tuesday that the attack on its corporate infrastructure last month netted the hacker some unidentified intellectual property. The Gmail hack of human rights activists it also complained of is a separate issue.

It appears the hackers used the same conduit to tunnel into another 30 odd companies, more than the 20 Google mentioned in its disclosure and some of them iDefense clients. Once inside they inserted a Trojan horse into the machines they breached and created a backdoor in the system where they could scoop out information.

And it was all done by e-mail. The hackers sent targeted e-mail containing a corrupt PDF file to employees with administrative access to the systems containing IP. When opened, it released the Trojan that ransacked the companies’ victimized servers for their booty.

iDefense thinks the hackers were after and in many cases got proprietary source code from the tech, defense and financial companies they targeted.

Apparently the same servers were involved in all the attacks and their IP addresses track back to a XEN VPS hosting company in New Jersey called Linode. The stolen code was then stored on servers at Rackspace, another hoster which says it’s been assisting in the investigation. The command-and-control servers are somewhere in Taiwan.

According to iDefense, “Two independent, anonymous iDefense sources in the defense contracting and intelligence consulting community confirmed that both the source IPs and drop server of the attack correspond to a single foreign entity consisting either of agents of the Chinese state or proxies thereof.”.

iDefense says the attack bears fingerprints similar to another attack on 100 tech companies last July and that the targets could have been compromised since then.

An unidentified source close to the investigation told the Dark Reading blog that “this brand of targeted attack has actually been going on for about three years against US companies and government agencies, involving some 10 different groups in China consisting of some 150,000 trained cyber-attackers.”

Ironically the Chinese government has repeatedly fretted about there being backdoors in Microsoft software.

The company has released AIR 1.5 for Linux, the first time the Linux desktop variant has made it as a production-grade, Adobe-supported release.

And now also for the first time AIR for Windows, Mac and Linux all have the same feature. For a while there the Linux 1.1 beta had widgetry that wasn’t in the others.

Adobe has been less pressed to come up with the Linux cut because Linux is pretty scarce on the corporate desktop; it quotes Gartner’s 1.8% number. With the new arrival, Adobe suggests that may change if only because Linux can now poach other operating systems’ RIAs.

Developers and designers can now target the three platforms with the exact same code without making any modifications – well, at least 90% of the time or slightly better, according to Adobe’s tests.

The Linux stuff supports Fedora Core 8, Ubuntu 7.10 or higher, and openSUSE 10.3. Adobe couldn’t explain why it was supporting test bed, community Linuxes like Fedora and openSUSE and not the finished goods.

It’s also working with Intel-supported Moblin Linux crew to get AIR on Atom-based netbooks and nettops and has cozied up with Android and Nokia for phones. (It’s working on Flash for iPhone but has to overcome Apple’s distaste for the widgetry.) It also expects to support China’s Red Flag Linux at some point.

AIR, of course, is a key component of Adobe’s pervasive Flash platform and enables web developers to use HTML, JavaScript, ActionScript and the open source Flex framework to deliver web apps outside the browser. It also accelerates performance with the SquirrelFish WebKit HTML JavaScript interpreter.

And the 1.5 rev includes a new encrypted database that meets enterprise security compliance requirements.

AIR for Linux is available in the same 15 languages as Flash Player 10.

AIR is free so it won’t help Adobe with its immediate problem – flat sales. The company said the other day that its earnings in the November quarter, a nasty period of time for practically everybody, were up 11% to $245.9, 46 cents a share, but sales, well, sales were only up $4 million year-over-year to $915.3 million.

Adobe’s expecting revenues to drop this quarter 5%-10% and has already cut 600 jobs, reportedly in one afternoon.

It’s also facing a determined Microsoft wielding its AIR-competitive Silverlight technology and willing to make what deals are necessary to win despite the fact that the Flash Player is on an estimated 98% of the PCs out there and Adobe’s ahead on the feature side while Silverlight’s only on 25%.