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Spyware programs are programs written with malicious intent. They can be as simple as annoying pop-ups that are meant to distract you or attract you to malicious sites. They can be software that tracks your web surfing habits or logs all the keystrokes you make with the intent of capturing your login id and passwords.
To protect your system from spyware:
Try to stay on known or trusted Internet sites. These sites are generally well monitored by their administrators and will rarely have spyware software embedded into the site.
Before surfing the Web, log into your account as someone other than "administrator". This would be an account on your system that has restricted privileges. This will lessen the possibility of a hacker gaining control of your computer and accessing personal information.
Enable browser security. Browsers such as Internet Explorer, Mozilla, Netscape, and Safari all have Internet security features built into them.
Disable the browser from automatically downloading cookies (which can be used for malevolent intent).
Download programs or software only from trusted sites.
Never click on unwanted pop-ups. Instead, shut them down by clicking on the red "X" in the upper right hand corner of the pop-up window.
Install anti-spyware software; keep it updated as you do your anti-virus software; and run it regularly. Several packages such as SpyBot and AdAware are free and do a great job at protecting your system from unwanted and annoying spyware software.
Install a pop-up blocker. These can be obtained from Yahoo or Google.
Overall, implementing these methods will provide another valuable layer of protection for your system.