Spyware is essentially any kind of software that tracks your computer usage, records information, or leaks sensitive information without your expressed consent. For example, spyware might record which Web sites you visit and when you visited them, record all your keystrokes, or perform an unauthorized inventory of your installed software.
Some forms of spyware eventually transmit collected data to a centralized location. For example, one type of spyware might alert someone that you're running a particular application. Other types of spyware might install backdoors into your system or configure your system's modems to make toll calls that will eventually be charged on your telephone bill. Still other forms of software, such as certain peer-to-peer file-sharing applications, could be classified as spyware (depending on your particular company policies) because those types of applications could be used to move files out of your network without your consent.
Spyware can enter a computer in variety of ways. By far the most prevalent way is through scripts that execute in Web browsers or email clients. Another way spyware can enter your computer is through the installation of software packages. For example, some people who propagate spyware intentionally design nifty attractive programs for the sole purpose of luring people into installing them because they also contain spyware. Similarly, useful programs such as the DivX video player might be intentionally installed to play DivX encoded movies but at the same time also install spyware.