This might be a bit drastic. The sites that one would want to protect against are https like paypal, banks, ebay and so forth. How about having a white list of https sites? This way the attack would not work unless it is included in one's white list. I would estimate that I go to less than 20 sites via https regularily, so it should not be a big deal to setup. It also might have other potential benefits for other unknown phishing type attacks. I am assuming that folks know to look for the https and/or closed padlock. Somebody that I know had their yahoo email, ebay, paypal and other account hijacked had no clue about https, so this might be a bad assumption.

Gervase Markham wrote:
After today's staff and drivers meetings, mozilla.org has decided on a short-term course of action for dealing with the IDN/punycode problem.

http://weblogs.mozillazine.org/gerv/archives/007556.html

Gerv
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