Spyware is any software that covertly gathers user information about you, your computer and your web surfing and sends it to someone through your Internet connection without your knowledge. Spyware can gather information about e-mail addresses, passwords and even credit card numbers. Spyware applications are typically bundled as a hidden component of freeware or shareware programs like Kazaa that are commonly downloaded from the Internet.
Spyware also steals from your computer by using its memory resources and eating bandwidth as it sends information back to the spy's home base via your Internet connection. This can also lead to system crashes or general system instability.