Is Your Site Marked by StopBadware.org

Google
If for some reason your site is being marked in the search engine listing at Google, you can go into the webmaster Tools section at Google and it will show you there. You will of course have to setup your site to start with, but it is a good indicator, and hopefully will tell you why, although I am not sure of that. Hopefully someone can show us what it looks like when their site is mark as distributing badware.

If your site has been flagged for badware, we let you know this in webmaster tools. Often, we find that webmasters aren’t aware that their sites have been compromised, and this warning in search results is a surprise. Fixing a compromised site can be quite hard. Simply cleaning up the HTML files is seldom sufficient. If a rootkit has been installed, for instance, nothing short of wiping the machine and starting over may work. Even then, if the underlying security hole isn’t also fixed, they may be compromised again within minutes. Source: About badware warnings from the Official Google Webmaster Central Blog

This will give you a good start on fixing it, at least it will let you know if your site has been hacked into and is distributing spyware / malware, etc. A gentleman whose site was hacked, SeoBuzzbox has posted in Google groups, here Badware Warnings and Query Stats and asked if it will affect his ranking in the future and will some of the terms the hacker targeted, and he ended up ranking for, go away.