Wowace.com site owner Kaelten has disabled the ads on WoW Ace Updater completely for now, and is talking to his Ad provider to find out what went wrong and which ads might be causing problems.
This isn't the first time a popular WoW site has had trouble with trojans in ads, and unfortunately, it is unlikely to be the last. Kaelten seems to be on top of it, though, so hopefully he'll get to the bottom of these claims. Since the ads are currently disabled, the program itself should already be safe to use. If you're feeling a bit skittish, though, you can check out some of Sean's recommendations for other upgrade programs here.
I should note that, being a religious user of WoW Ace Updater myself (I run it at least a good 5 times a week), I just made sure to scan my computer with the aforementioned Spybot Search and Destroy as well as AVG Free Edition. According to those programs, It has a clean bill of health.