Spyware is software that is installed on your computer (usually without your knowledge) that secretly gathers data about your internet usage and computer habits and sends that information to advertisers or other interested parties. There is no way you can control what information is being sent out about you. Spyware attaches itself to a computer either as a software virus, or as a result of a new program being installed.

Spyware can track where you surf on the internet, deliver pop up ads, and even in some cases collect credit card information. When users visit sites that have online forms to be filled out, such as contest sites, or shopping sites, etc., some spyware programs can capture the information from online forms.

There are many types of spyware that your computer can become infected with.  Some of them you may not have heard of before.  Here is a brief overview of the most common types:

• Ad rotators:  Most people don't realize when this spyware is installed on their computers.  What ad rotators do is replace the regular banner or pop-up ads that appear in your web browser with ads from the spyware developer's partners.  This slows down how fast your internet pages load. 
  
  
• Adware:  Adware is not necessarily spyware, but some adware contains spyware.  Always read the fine print in the End User Licence Agreement, or their Terms of Use to find out exactly what they expect you to give up in order to use their product.  People who blindly click OK without checking, often find themselves saddled with unwanted spyware.
  
  
• Browser hijackers:  These are the most annoying types of spyware out there.  They change your home page or search page on you so that you get stuck going to the spyware producer's site.  Each time you reset your home page back to where you want it to go, the browser hijacker will just change it back to their page the next time you reboot.  Browser hijackers also flood you with pop-ups, add unwanted sites to your bookmarks, put unwanted links in your forum posts, and exploit security vulnerabilities in your system.
  
  
• Cookie trackers:  Most cookies are good.  They help you surf your favourite sites faster, keep you logged into sites like MSN, help keep your online shopping organized, and generally make surfing the internet easier.  Bad cookies will keep track of information about your surfing habits so that it can be collected and sent to monitoring firms.  Good antispyware programs will help sort out the bad cookies, but keep the good ones working properly.  
  
  
• Data miners:  This is the most common type of spyware.  Data miners gather information about which websites you visit.  That information is then sent to a central database where it can be used to deliver targeted advertising, or sold to other interested parties.
  
  
• Dialers:  This type of spyware takes control of your computer by using your dial-up modem to call toll numbers and rack up huge charges without your knowledge or permission.
  
  
• Keyloggers:  These are creepy.  Usually these are placed on a person's computer by someone who knows them, like a spouse or boss - or even your kid's annoying computer geek friend.  Keyloggers keep track of every keystroke that is entered into the computer capturing chat sessions, instant messages, credit card numbers, user names and passwords.  They are harder to detect than most other types of spyware.
  
  
• Snoopware:  Other types of spyware usually installed in office computers that keeps track of every single thing an employee does on their computer.  Some will take screenshots of whatever's displayed onscreen at certain intervals of time, and use a combination of other spyware such as keyloggers and data miners to record all websites and employee looks at and record all keystrokes that occur at that particular computer. 
  
  
• Zombies:   This type of spyware uses your computer to perpetrate attacks on other users.  One type of attack can be in the form of spam - where your computer sends unsolicited email to thousands of other computers.  When the spam is tracked back, it's tracked to your computer - not the spyware creator's machine.  Zombies can also create a network of computers which are used in denial of service attacks that are used to crash web sites. 

So in a nutshell, spyware keeps tabs of what you are doing on your computer, and where you are going online.  It can keep track of keystrokes to capture sensitive information like passwords and credit card numbers.  It can take screenshots of pages you read and capture emails and instant message content.  It transmits that data back to databases where that information is used to monitor your computer use, deliver ads to your computer, or sold to other parties.  It can even control your computer in order to call expensive toll numbers, or launch attacks against other people and websites.