Spyware

Spyware is the latest security risk on the net.
Spyware is a sub-categorie of adware. Not all adware is spyware, lets be clear on that.
Spyware does more then just showing banners, it collects data from your computer, which banners you click on, which sites you visit, ...

Many ad-programs use this technologie to find out who clicked on there banners. This way they can show you more specific banners. on which you gonna click more and that means more money for them.
These little programs are usually hidden in other programs.
Here is a list of know spy-programs :

These programs are hidden in many free-ware programs.
Here is a list of suspected programs. This list is not being updated anymore. There are just to many.
You can also check another database @ Spychecker.com.

Is spy-ware illegal or not ?
I don't know. But they usually put something like a "warning" in the license agreements and the privacy statements.
So that covers them legally ?

A good program to detect the spy-software is Ad-Aware.
For more information of this program go to the homepage.
Scans also the registery and your harddrives. Scans for all know spyware and is updated regularly.
But Ad-aware reports also all your programs that show ads.

Another good program is Spybot.
Check out there site at http://spybot.eon.net.au/index.php.