What is a computer Virus?
A computer virus is a program that can ‘infect’ other legitimate programs by modifying them to include a possibly ‘evolved’ copy of itself. Viruses can spread themselves, without the knowledge or permission of the users, to potentially large numbers of programs on many machines. A computer virus passes from computer to computer like a biological virus passes from   person to person.

Viruses can also contain instructions that cause damage or annoyance; the combination of possibly damaging code with the ability to spread is what makes viruses a considerable concern.

How do viruses spread?
Viruses can often spread without any readily visible symptoms. A virus can start on event-driven effects (for example, triggered after a specific number of executions), time-driven effects (triggered on a specific date, such as Friday the 13th) or can occur at random. 

1. Display a message to prompt an action which may set of the virus
2. Erase files
3. Scramble data on a hard disk
4. Cause erratic screen behavior
5. Halt the PC
6. Just replicate itself!

This is how a virus spreads through the Internet

This is how a virus spreads in standalone system

Spreading Virus – Local Networks

The first computer virus ever to be see was called BRAIN and it appeared in 1986.

5 World’s Worst Virus Attacks

1. Love Letter
LoveLetter is the virus everyone learned to hate in 2000. The infection affected millions of computers and caused more damage than any other computer virus to date. Users were infected via e-mail, through Internet chat systems, and through other file sharing systems. The worm sent copies of itself via Microsoft Outlook's address book entries. The mail included an executable file attachment with the e-mail subject line, "ILOVEYOU." The worm had the ability to overwrite several types of files, including .gif and .jpg files. It modified the Internet Explorer start page and changed Registry keys. It also moved other files and hid MP3 files on affected systems.

2. Klez
The Klez worm, which blends different virus traits, was first detected in October 2001. Klez distributes itself like a virus, but sometimes acts like a worm, other times like a Trojan horse. Klez isn't as destructive as other worms, but it is widespread, hard to exterminate--and still active. In fact, so far, no other virus has stayed in circulation quite like Klez. It spreads via open networks and e-mail-regardless of the e-mail program you use. Klez sometimes masquerades as a worm-removal tool! It may corrupt files and disable anti-virus products. It steals data from a victim's e-mail address book, mixing and matching new senders and recipients for a new round of infection.

3. Melissa
The Melissa virus swamped corporate networks with a tidal wave of e-mail messages in March 1999. Through Microsoft Outlook, when a user opened an e-mail message containing an infected Word attachment, the virus was sent to the first 50 names in the user's address book. The e-mail fooled many recipients because it bore the name of someone the recipient knew and referred to a document they had allegedly requested.

So much e-mail traffic was generated so quickly that companies like Intel and Microsoft had to turn off their e-mail servers. The Melissa virus was the first virus capable of hopping from one machine to another on its own. And it's another good example of a virus with multiple variants.

4. Nimda
Nimda (also known as the Concept Virus) appeared in September 2001, attacking tens of thousands of servers and hundreds of thousands of PCs. The worm modified Web documents and executable files, then created numerous copies of itself. The worm spread as an embedded attachment in an HTML e-mail message that would execute as soon as the recipient opened the message (unlike the typical attached virus that requires manual launching of the attachment). It also moved via server-to-server Web traffic, infected shared hard drives on networks, and downloaded itself to users browsing Web pages hosted on infected servers. Nimda soon inspired a crowd of imitators that followed the same pattern.

5. Anna Kournikova worm

The Anna Kournikova (or VBS.SST@mm) worm, appearing in February 2001, didn't cause data loss, although in the process of boosting the profile of its namesake, the Russian tennis player, it did cause embarrassment and disruption for many personal and business users. The worm showed up in Microsoft Outlook users' e-mail in-boxes with an attachment (supposedly a picture of Kournikova). The attachment proved hard to resist. The result? Clicking the bogus attachment sent copies of the worm via e-mail to all addresses found in the victim's Outlook address book. Kournikova also brought about a number of copycat variants.

Most worm creators have never been identified, but a 21-year-old Dutchman, Jan de Wit, admitted to unleashing this worm. The admitted virus writer is appealing a 150-hour community service sentence handed down in September 2001 by a judge in the Netherlands.