Scareware and other Rogue security programs
Below are some excellent articles and awareness on this popular form of attack. These programs are improving in their methods of emulating Anti-virus programs and should be avoided as they are difficult to clean.
Excellent Article on Scareware and other Rogue security programs
QUOTE: In some cases, the fake software you buy may actually provide you with some nominal protection. But mostly for your $30 to $80 the only thing you get is temporary relief from the obnoxious dialogue boxes, and misleading hard drive scans.
HOW SCAREWARE TRICKERY ENSNARES INTERNET USERS
1 Criminals buy blocks of ad space on websites, intermittently slipping in a tainted ad.
2 Just visiting a webpage with a tainted ad causes a fake warning box to appear.
3 Clicking "OK" or "Cancel" launches the same thing: a "free scan."
4 After you've been lured into a fake "free" scan of your PC:
5 The bogus scan will purport to find a virus infestation.
6 Ensuing boxes steer the user to activate "Personal Antivirus," on left.
7 The activation prompts take the user to a shopping cart.
8 Declining to place an order triggers endless fake scans.
What is Scareware
QUOTE: Scareware is a type of malware designed to trick victims into purchasing and downloading useless and potentially dangerous software. Scareware, which generates pop-ups that resemble Windows system messages, usually purports to be antivirus or antispyware software, a firewall application or a registry cleaner. The messages typically say that a large number of problems -- such as infected files -- have been found on the computer and the user is prompted to purchase software to fix the problems. In reality, no problems were detected and the suggested software purchase may actually contain real malware.
Scareware programs produced by those companies include: DriveCleaner, WinAntivirus, ErrorSafe, WinFixer and XP Antivirus