A virus designed to demonstrate security holes in Microsoft's Windows CE operating system but not cause damage was identified by security companies over the weekend.

The WinCE4.Duts.A virus (aka Dust) only affects devices running ARM processors and infects Pocket PC PE files in the root directory, according to Bucharest-based Softwin, which first reported the virus on Saturday.

It raises a dialog box which asks "Dear User, am I allowed to spread?" If the user agrees, the virus appends itself to all .EXE files not already infected in the current directory, according to anti-virus vendor Symantec. The virus contains no payload, Symantec said.

The virus was sent by its authors to anti-virus vendors rather than being distributed in the wild and was not designed to propagate on a massive scale, but rather to demonstrate that devices running Microsoft Windows CE can be infected by malicious code, according to Viorel Canja, head of Softwin's BitDefender Labs unit.

There are over 17 million Pocket PCs, smartphones, and other Internet appliances currently using the Windows CE operating system, according to Softwin.

Last month saw the appearance of the first-ever virus designed to work with mobile phone networks. Cabir was a network worm that infected phones running Symbian may was not dangerous and may have been a proof of concept worm from an international group of virus writers.