Spyware is a pain and security risk to computer users. WHATIS.com defines spyware while Lavasoft describes different carriers of spyware and what it can do.
Most people are familiar with freeware, shareware, cookies, media players, interactive content, and file sharing. What they may not realize is that some of the aforementioned may contain code or components that allow the developers of these applications and tools to actually collect and disseminate information about those using them.
They can track your surfing habits, abuse your Internet connection by sending this data to a third party, profile your shopping preferences, hijack your browser start page or pages, alter important system files, and can do this without your knowledge or permission. The security and privacy implications of these exploits should be quite obvious and undesirable on any system or network!
Alarming statistics on spyware frequency and user unawareness can be found in The Spyware Epidemic: Dealing With "Legal" Malicious Code.
90 percent of all Windows PCs are infected by spyware.
80 percent of all home computers are infected by spyware.
88 percent of owners of infected systems are not aware their computer is infected.
75 percent of PC owners believe they are safe from online threats.
Only 24 percent of PC owners are actually knowledgeable about how to handle spyware.
65 percent of all PC users do not run up-to-date anti-virus software.
50 percent of all broadband users do not use a firewall. The number drops to 7 percent for dial-up users.
Andrew Brandt discusses the testing of anti-spyware products as well as citing proposed legislations to deal with spyware in his comprehensive article Some anti-spyware companies use confusing ads, and our tests show their $20-$60 products are less effective than free competitors.
Brandt also cites SpywareGuide as a good resource which lists known spyware.

