Spy ware
Spyware is kind of like a very bad version of a “Net Nanny”.
These pesky little programs monitor EVERYTHING you do; this includes inserting passwords, takes note of it, and will send it back to the client side.
Along with monitoring your activities, it also slows down your computer, eats up system resources, and makes random errors appear.
Some examples of Spyware are Comet Cursor, Bonzi Buddy, and Real Player.
There are many more.
How to remove it
The easiest way to detect and remove spyware is with Ad-Aware.
You can get ad-aware here: http://download.com.com/3000-2094-10045910.html?legacy=cnet