What is Trojan horse?

A destructive program that masquerades as a benign application. Unlike viruses, Trojan horses do not replicate themselves but they can be just as destructive. One of the most insidious types of Trojan horse is a program that claims to rid your computer of viruses but instead introduces viruses onto your computer.
The term comes from the a Greek story of the Trojan War, in which the Greeks give a giant wooden horse to their foes, the Trojans, ostensibly as a peace offering. But after the Trojans drag the horse inside their city walls, Greek soldiers sneak out of the horse's hollow belly and open the city gates, allowing their compatriots to pour in and capture Troy.
Trojan horses are broken down in classification based on how they breach systems and the damage they cause. The seven main types of Trojan horses are:
Remote Access Trojans
Data Sending Trojans
Destructive Trojans
Proxy Trojans
FTP Trojans
security software disabler Trojans
denial-of-service attack (DoS) Trojans
Also see The Difference Between a Virus, Worm and Trojan Horse in the Did You Know? section of Webopedia.