that didnt look like a virus to me, or anything that was propagating a virus. if you have that still, email it to me and Ill look again whoo (AT) whoo (dot) org
Either way, you would do well to start with trying to figure out who, if not you, uploaded that file. If you uploaded it, and it was a real image at that time, then obviously its been overwritten, maliciously.
If it wasnt you, then you might have a convo with whomever did.
As far as troubleshooting, moving beyond that, the posts on here dealing with recently hacked sites are growing in mubers by the day, so its hard to keep up with specific instructions.
You might want to do a little reading.
http://wordpress.org/support/topic/168964?replies=20
http://wordpress.org/support/topic/168952?replies=33
along those same lines, it would be very useful to have the timestamp on that file, as it would tell you/us what date it was modified, but you appear to have deleted it.
and while I am here, I'll pimp this again:
I have a plugin that provides logging.. intended for troubleshooting exactly this kind of stuff.
http://www.village-idiot.org/archives/2008/04/16/postlogger-for-wordpress/
eventually people will get with it and realize that they need to do more than just "clean up" after a successful attack.