DarkTenka said:
Master Boot Record Viruses have existed since Windows 98, thats nothing new.
Actually, they've existed since DOS.

Most virii in the 80s used to infect the boot record of floppy disks and hard disks.
Operating systems have become more robust since then, but I would guess it's still possible to find a way to write on the MBR. Windows itself must do it to install the bootloader that allows you to press F8 (or something like that) while booting and choose a custom configuration for troubleshooting your pc.
I would think the more clever bit is this "custom encryption algorithm" which may be tough to crack, but I agree, infecting the boot record isn't a new idea.
Furthermore, there isn't much you can actually do from the code in the MBR, because to do anything useful these days you need functionality that requires a running OS. Say the botnet is used to send spam - it must use the network drivers and the TCP/IP stack, so it has to go through Windows and its drivers. It might be hard to remove it, but the symptoms could be detectable. I am confident antivirus companies will find a way to detect it and deal with it sooner or later (maybe by just silently blocking it).