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Viruses
A virus is a bit of computer programing that can damage files, delete files or even reformat the hard drive. Some viruses are not quite so serious but merely make the computer do odd things such as open up windows of text, images, video or audio messages. In the least, they slow a computer down. At their worst, they cause loss of data or the computer to completely crash.
Viruses are self replicating but not self propagating. They need to be sent from computer to computer by human intervention.
Worms
Worms are similar to viruses except that they can propagate by themselves from computer to computer across and network or the internet.
Trojans
Trojans or Trojan Horses are computer programs that must be executed by the user. The user is generally tricked into this. Once the Trojan has been executed there are many things it may do such as send out confidential information via a computer backdoor, send spam E-mail, enabling remote access to the computer, taking screen shots etc. They are serious threats to your security. e.g. you could have your Internet Banking details seriously compromised by a Trojan and find that lots of money can be taken out of you bank account.
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