There are so many terms that refers to virus and malwares that are often interchanged that results to mis-conceptions. Here are some of those terms
Virus- or computer virus refers to a computer program that infects another program. Technically a true computer virus attaches itself or a part of it into another program or a file. Computer virus, like its biological counter part needs a 'host' to infect and spread. It primarily attaches itself to an executable (.exe) or command (.com) files.
It spreads when an infected program is opened then it will infect -by attaching a copy of its code to- another program. When an infected program is copied or run in another computer, it repeat the process again and again. Most of these computer virus are capable of leaving a part of it running in the memory (memory resident) and and will look for another program to infect. Current forms of computer virus are capable of spreading itself through the network and even through the Internet.
Worm - is a self replicating program. It creates copies of itself to available folders (directories) and drives, some later versions are even capable of replicating itself across networks. Unlike a virus, a worm does not need a host program to infect.
Some worms create copies of itself with seemingly random file names, some are named after the folder where it is contained and will display also a folder icon, deceiving the user to double click on it. Doing so, will activate the worm and spread itself further.
Trojan Horse - named after the epic tale of the Trojan War. In the story the Greeks gave the Trojans a giant wooden horse as a "gift" or sign of surrender. Once the wooden horse was inside the impenetrable walls of Troy, the select Greek soldiers hidden inside the horse opened the gates that lead to the fall of Troy.
In computers, a Trojan horse is seemingly harmless and even useful program and often very inviting. Unlike the virus or worm, a Trojan horse does not replicate itself, but once running it does some other routine that is hidden from the user, it could get some information from your computer, or download a virus or worm and/or could do something that would damage your system.
Malware - short for Malicious Software, is any programs or script created with malicious intent. Virus, Worms and Trojan Horses are just three of the many forms of malware. Most often though the term virus is erroneously used to point out any of the Malware mentioned.
More definitions coming soon.