If your site has "this site may harm your computer" in the search results how long can you be in that situation before Google takes action. When they do take action does anyone know what that action is? I assume it results ultimately in delisting but I can't find anything specific.
The site, with the warning, seems to stay in the google rankings. However, if someone clicks on that listing, they would be taken to a google warning page telling them to go no further. To get to the site you actually have to copy and past the address into your browser's location bar. This would seriously reduce the amount of traffic you get from google.
If you request a review through Google Webmaster Tools you should see a delisting in about 24 hours providing your site is verified to now be clean.
Repeat instances don't seem to affect this timescale.
We've had a situation in the past where a shared server host was hacked and the sites were continually reinfected. One one particular site I requested reviews several times, each time it was delisted within a few hours, but no more than a day.
This was 4 or 5 years ago though, so YMMV.
This happened to me once. I installed a plugin to a wordpress website that contained a link to a website. That website was flagged and so was mine. I corrected the problem and notified them through Google webmaster tools.
I suppose that if someone cannot correct the problem, then his website will be lost from SERPs eventually.