A keylogger is a small program that sits on your PC quietly capturing each key you press on your keyboard. It either logs each keystroke to a file, or sends it off somewhere on the internet.
It’s used to spy on people. By capturing keystrokes your login and password can be revealed, as well as other confidential information. And usually they’re what’s known as “stealthy” programs – most of the time you wouldn’t know it’s there.
Where do they come from?
There are quite a few keyloggers available. Most are written by hackers (the bad kind). A few are written by commercial software companies (more on that below).
Are they legal?
Usually no. They’re used as spyware to capture your passwords which is illegal in most places.
How can you detect them?
Use a good anti-spyware program. Most antivirus packages come with this feature these days, others are available separately. There are free ones too. Search Google for current a list.
But there’s another kind of keylogger that you can’t detect this way. You can buy a little plastic device that plugs in between your keyboard and your PC. Since it’s directly connected to the cable hanging off your keyboard it can detect every key stroke and record it. Someone has to have physical access to your PC to install it (and to later remove it). You need to look at the back of your PC where the kayboard plugs in to detect it. Search here for a list of these devices.
Recently a US court has looked at a commercial keylogging company called CyberSpy and decided it’s illegal. They’ve ordered CyberSpy to stop selling their software (called RemoteSpy). Unfortunately there are too many alternatives for people keen on spying and stealing passwords. More on this here.