This is not exactly a new concept, but it came up again at the recent BlackHat.

The idea is that you could be attacked by a virus that flashed the firmware associated with peripheral devices via their ROM.

It is certainly possible, but I don't think it is anything to get too concerned about at the moment. It is difficult to do, and would only be effective against specific targets.

That said, If you encounter suspicious activity that you cannot trace to conventional vectors it might be worth considering flashing your firmware? assuming, of course that the new firmware is larger or the flash includes blank space to fill the entire EPROM.

Article:
http://www.securityfocus.com/brief/447