Viruses
Basically, a virus is a piece of programming code, usually disguised as something else, that causes some unexpected and usually undesirable event. Viruses can be spread through e-mail, downloaded files, or on disks that you open on your computer.
Viruses almost always rely on human interaction to infect your system and spread to other computers. At one time it was simple enough to send a virus as an attachment to an e-mail and expect that the person reading the e-mail would open the attachment. As people began to learn about not opening unknown attachments, the virus writers started to use social engineering to get users to open them. The "I Love You" virus was one of the first of these. If you were to get an attachment that looks to be a note from an admirer, you would be more likely to open it.
Viruses have been sent in the guise of pictures, files to be reviewed, important messages, and even as fake security updates that look like they have come from Microsoft. (Note: Microsoft will NEVER send an attachment to you to update your computer's security. You have to go to Windows Update to download the patches that are appropriate for your computer.)
Although an up-to-date antivirus program can alert you to a virus when it is discovered (like when you try to open a document or start a program) some of the viruses are very hard to get rid of. If they have replaced a file that is necessary for Windows to run, the antivirus program may not be able to clean or delete the virus - the operating system will not allow changes to that file while it is in use. That is why it is essential to create an up-to-date repair disk or revovery disk every time you update your antivirus program. These disks will allow you to start your computer without going into Windows and hopefully clean the infected file(s).
Are all antivirus programs created equally? Well, here is a comparison of what Panda and Trend Micro see as the main virus problems right now. This data is direct from their sites, so it is as up-to-date as they provide. Interesting to note the differences between the two!