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A blended threat is a type of exploit that uses multiple techniques to attack a system. The definition is broad, but this generally means propogating in multiple ways as well as attempting to use multiple vulnerabilities in the target system.
To give a simplified example, a blended approach might send an e-mail with an attachment to the targeted computer. While the initial payload could be a virus in the attachment, it could also have worm-like capabilities to spread after making the original infection. Real life examples of blended threat programs include CodeRed and Bugbear.
A significant percentage of modern malware are actually blended threats even though they are referred to as a "worm" or "virus." This is especially true with botnets where exploits involve multiple forms of propagation, trojan-horse like functionality, and then the capability to launch a coordinated denial of service attack.