Viruses are small programs that:

Like the Trojan Horse for which they are named, Trojans sit on your computer and wreak havoc from within.
Trojans are usually spread by downloading programs from the internet, often illicitly.
The Trojan is embedded in the downloaded program and installs itself when the intended program is installed.
Trojans:

• Collect data from your computer and forward it to whoever knows how to ask for it
• Invite other malicious programs onto your computer
• Allow strangers to use your computer for their own purposes
• Do not self replicate
• Do not actively seek to damage your computer