Viruses are not a issue with Linux.
But security is. Most certainly it is. It's not the most secure OS out there, but it can be one of the most if you want it to be and you know what your doing.
SELinux is one thing people have been using. If you want to you can use Fedora Core2 under SELinux mode if you want. It's something that you have to enable at install time, and it will not work on 3rd party software unless it was specificly designed to work with SELinux. It was something developed by the NSA to make their own Linux distribution suitable for high security government use.
see here for how to enable it at install time.
It's kinda neat, but it's very unweildy. It's difficult and complex to work with, but it's there if you want it to be.
Then you have other projects like
gsecurity and modified distros like
Adamantix (Debian based), and
hardened Gentoo.
Those distros and other projects (SSP (propolice) patches for GCC, PaX, and others) and distros are working on standardizing and impimenting new security models, features, and practicies and these are being integrated back into more mainstream distros.
(also other OS's (BSD and freinds) benifit from this thing, and they contribute to it greatly. Also if you want the most secure OS by default, get OpenBSD. You can't go wrong with OpenBSD)
Also you can strip out features, services, and software out of linux in order to make it much less likely for people to find ways into your OS. In windows, by comparision, you still need to have a full GUI running and even programs like Internet Explorer installed on your computer to run a web server (not to say that the issues with IE and such can't be mitigated by simply not using it for anything, but it's still kinda silly).
Then additional to that you can run software in sandboxes and chroot jails in order to contain any damage caused by a intrusion using software exploits on those jailed services.
My very subjective and bias rating system for secure OSes:
0 = prepared to be owned within minutes
10 = decently secure OS.
This is connected directly to the internet and without a external firewall.
Original Windows XP default installation: 0.5
Windows XP SP1a default install: 1.5
Windows XP SP2 default isntall: 3
Windows XP run by a average "techy" person (SP2 sucks, some warez software): 2-3
Windows XP run with good firewall, software protections, up to date, etc: 4.5-5.5
Average Linux Distro default (full or server) install: 2.5-5, depending on distro.
Linux install + basic steps taken for security taken by admin + simple software firewall (like Fedora's default FW): 6.5
Same as above, but not kept up to date: 3.5
Special harddened Linux versions + good security policies followed by user: 6.5-8 (difficult to judge)
OpenBSD default install: 6
OpenBSD + hardenning steps taken: 7
OpenBSD + lots of non-default software installed and services running: 5
Win2003 server + ran by a smart admin: 5
Linux + ran by a moron: -3
For security ratings below5: +2 points for adding a external router and firewall. (of the store bought veriaty)
For between 6-8: +1 point for seperate router and firewall.
For 8+: 0.5 points for seperate router and firewall.
Mitigating firewall factors:
-.5 points for first network service exposed to the internet for rattings of 7 and below, -.25 for each additional port after that for 7 and below. +.05 points for obscuring OS details. -1 point for running known buggy/insecure software.
Note that this is typical situations, other factors would include extraordinary security measures like honey-pots, network intrusion detection capabilitis from a seperate workstation, stuff like that.