I'm on the network right now and I noticed in the "searches" box under statistics has a value for "virus blocked". That value is 10. I'm curious what this means, is my virus scanner picking these up?

I don't think so, cause I havent a virusscanner installed now but I see the same message

This is specific to the Mandragore virus for now, Gnotella passively monitors results and removes the virus so others do not accidentally download and spread it as well as blocking it from any search results you receive. These are not spotted by your virus scanner, only by Gnotella.