Is bitcoin vulnerable to a DOS/spam attack? What happens if someone maliciously decides to make squillions of transactions on the Bitcoin network? 

I see there being two vulnerabilities. Firstly - computation resources used, though this doesn't seem to be a problem, at this stage, given the size of the mining pool. 

But also - blowing out the size of the block chain. What if someone were to persist over a year of spamming transactions?
That's what transaction fees are for. You have to pay a fee for every transaction you want to have included in the block chain, especially if your transaction is for a small amount or if there are many transactions already waiting in the transaction pool.

Also, the size of Bitcoin blocks is limited. There is also a limit on the number of signature operations in a block. The most an attacker can do is to raise transaction fees.