definitely not a virus.

"The Recycler folder is used only on NTFS partitions. The Recycler folder contains a Recycle Bin for each user that logs on to the computer, sorted by their security identifier (SID)." read: http://support.microsoft.com/kb/171694

it can be deleted but at least one will always be leftout coz windows will not allow you to. you can hide it instead by doing this procedure:
1. go to Start/Control Panel/Folder Options
2. in the menu tabs click "View"
3. mark "Do not show hidden files and folders", click Apply and Ok.

also, to ensure that no one deletes important system files, check mark "Hide extensions for known file types" and "Hide protected operating system files (Recommended)".

Refresh and you will not see the Recycler folder...the way it should be. 

I'll agree to everything coolbuster said except the "Hide extensions for known file types"part. Some viruses are know to look like innocent folders or images, and when you select them they are actually .exe files in disguise.