Spyware

Spyware is software that resides on a computer and sends information to its creator. That information may include surfing habits, system details or, in its most dangerous form, passwords and login information for critical applications such as online banking. Many spyware programs are more annoying than dangerous, serving up pop-up ads or gathering e-mail addresses for use in spam campaigns. Even those programs, however, can cost you valuable time and computing resources.
In addition to spyware, there are other kinds of invasive programs that can make your computing life miserable, so it's worth it to take a moment to define a few terms:
Malware: Short for malicious software, malware is a catch-all phrase used to define any program that runs on a computer without the user's knowledge and performs predetermined functions that cause harm. In that sense, spyware can also be malware.
Adware: Similar to spyware and malware, in that it resides on a computer without the user's knowledge, adware specifically refers to programs that display pop-up advertisements. The subject matter of the ads is often based on surfing habits, but may also be tied to a specific advertiser.
Virus: As the name implies, a virus is a program that is designed to spread itself among files on a single computer or computers on a network -- usually the Internet. Often, crackers (hackers with malicious intent) create these programs just to see how far they will spread. Unfortunately, even a supposedly harmless virus can have a serious effect on processing and network operations.
Worm: Similar to a virus, a worm spreads itself around a network. Worms, however, do so by making copies of themselves as they spread. They also may be capable of changing their profile to avoid detection.
Trojan: Like the infamous horse of Greek mythology, the computer version takes on the appearance of something benign, such as an update or add-on to an actual program. Once on your computer, it may perform harmful functions such as erasing your hard disk or deleting all your image files. Like spyware, a Trojan may also gather information and send it to the developer.
Cookie: While cookies aren't really malware, they can be used in similar ways. Cookies are small data files used by Web sites to store information on your computer. For example, a shopping site may want to identify items you've looked at, but not purchased, or store data on current purchases until you head for the checkout. A less scrupulous site, however, may decide to look through your cookies for personal information, such as recent sites you have visited.