What is Spyware?
Any product that employs a user's Internet connection in the background without their knowledge, and gathers/transmits info on the user or their behavior. Many spyware products will collect referrer info (information from your web browser which reveals what URL you linked from), your IP address (a number that is used by computers on the network to identify your computer), system information (such as time of visit, type of browser used, the operating system and platform, and CPU speed.) Spyware products sometimes are wrapped in other commercial products, and are introduced to machines when those commercial products are installed. See also Adware.
What is a Trojan horse?
Trojan Horses are impostors--files that claim to be something desirable but, in fact, are malicious. A very important distinction between Trojan horse programs and true viruses is that they do not replicate themselves. Trojans contain malicious code that when triggered cause loss, or even theft, of data. For a Trojan horse to spread, you must, invite these programs onto your computers--for example, by opening an email attachment or downloading and running a file from the Internet.