Despite its name, the term "spyware" doesn't refer to something used by undercover operatives, but rather by the advertising industry. In fact, spyware is also known as "adware." It refers to a category of software that, when installed on your computer, may send you pop-up ads, redirect your browser to certain web sites, or monitor the web sites that you visit. Some extreme, invasive versions of spyware include any software that collects information on user behavior (surfing patterns, keystrokes, preferences, etc.) from desktops and ships it offsite to an unknown third-party server. There are distinctions between commercial spyware (adware) and malicious spyware, but in the end, it’s all spyware. Another defining characteristic of spyware is its installation methods – typically spyware installs in one of three ways:

• Drive-by installs – this is the most common – a drive-by install typically begins downloading software through the browser upon a visit to a Web page. Depending on the browser, its patch level, and the user’s security settings, the user may be prompted with a “yes/no” dialogue box, or not. In some cases, even if the user clicks “no,” the install may continue.
• Browser exploit – some spyware installs via a downloader Trojan, which takes advantage of vulnerabilities in Internet Explorer and acts as a sort of beachhead agent for spyware. This agent, once installed, can download multiple flavors of spyware.
• Embedded install – often spyware will be packaged with “free” programs (e.g., Kazaa) and the user agrees to accept the spyware in payment for using the program for free.

Because of the extra processing, spyware may cause your computer to become slow or sluggish. 90% of Internet-connected computers are infected with spyware.There are also privacy implications:

• What information is being gathered?
• Who is receiving it?
• How is it being used?

The following symptoms may indicate that spyware is installed on your computer:

• you are subject to endless pop-up windows
• you are redirected to web sites other than the one you typed into your browser
• new, unexpected toolbars appear in your web browser
• new, unexpected icons appear in the task tray at the bottom of your screen
• your browser's home page suddenly changed
• the search engine your browser opens when you click "search" has been changed
• certain keys fail to work in your browser (e.g., the tab key doesn't work when you are moving to the next field within a form)
• random Windows error messages begin to appear
• your computer suddenly seems very slow when opening programs or processing tasks (saving files, etc.)

The first step to controlling spyware is to prevent spyware from installing in the first place. Although some existing desktop anti-spyware products purport to block spyware installs, this approach has not been very effective to date.
spywarewarrior.com/asw-test-guide.htm

A more logical point of control on a network is the gateway to the Internet. Blocking spyware at the gateway effectively blocks downloads of spyware on the network. WinProxy 6.0 has been designed to protect you from all manner of Internet threats, particularly spyware/adware, by blocking these threats before they get to you.

WinProxy 6.0 is the world's first true gateway anti-spyware solution, using multiple approaches to protect your from spyware.

1. Blocks URL's of known spyware sites
2. Blocks connections outbound to known spyware sites from spyware infected PCs.
3. Blocks "Drive by" downloads thereby preventing sneaky spyware from installing on a PC
4. Blocks known spyware files from entering the network
5. Blocks automatic spyware installation

In addition, WinProxy also blocks spyware with its antivirus and URL filtering features:

1. Antivirus vendors McAfee and Panda Software both include over 200 Anti-Spyware signatures in their pattern files. Enable one of these licenses in WinProxy by purchasing an Antivirus subscription.
2. URL Filtering from Blue Coat Content Control also blocks hundreds of known Spyware and Adware sites. Buy a URL filtering subscription and block users from accessing many sites where spyware and adware are hosted.

Other measures you can take to stop Spyware include:

• using a non-Internet Explorer web browser like Firefox or Mozilla
• using a non-Outlook email client like Eudora or Mozilla
• Install XP Service Pack 2 on your XP clients
• Use a good pop-up blocker (google toolbar is free)