Computer viruses are called viruses because they share some of the traits of biological viruses. A computer virus passes from computer to computer like a biological virus passes from person to person.

Early viruses were pieces of code attached to a common program like a popular game or a popular word processor. A person might download an infected game from a bulletin board and run it. A virus like this is a small piece of code embedded in a larger, legitimate program. Any virus is designed to run first when the legitimate program gets executed. The virus loads itself into memory and looks around to see if it can find any other programs on the disk. If it can find one, it modifies it to add the virus's code to the unsuspecting program. Then the virus launches the "real program." The user really has no way to know that the virus ever ran. Unfortunately, the virus has now reproduced itself, so two programs are infected. The next time either of those programs gets executed, they infect other programs, and the cycle continues.
If one of the infected programs is given to another person on a floppy disk, or if it is uploaded to a bulletin board, then other programs get infected. This is how the virus spreads.

The spreading part is the infection phase of the virus. Viruses wouldn't be so violently despised if all they did was replicate themselves. Unfortunately, most viruses also have some sort of destructive attack phase where they do some damage. Some sort of trigger will activate the attack phase, and the virus will then "do something" -- anything from printing a silly message on the screen to erasing all of your data. The trigger might be a specific date, or the number of times the virus has been replicated, or something similar.

As virus creators got more sophisticated, they learned new tricks. One important trick was the ability to load viruses into memory so they could keep running in the background as long as the computer remained on. This gave viruses a much more effective way to replicate themselves. Another trick was the ability to infect the boot sector on floppy disks and hard disks. The boot sector is a small program that is the first part of the operating system that the computer loads. The boot sector contains a tiny program that tells the computer how to load the rest of the operating system. By putting its code in the boot sector, a virus can guarantee it gets executed. It can load itself into memory immediately, and it is able to run whenever the computer is on. Boot sector viruses can infect the boot sector of any floppy disk inserted in the machine, and on college campuses where lots of people share machines they spread like wildfire.

In general, both executable and boot sector viruses are not very threatening any more. The first reason for the decline has been the huge size of today's programs. Nearly every program you buy today comes on a compact disc. Compact discs cannot be modified, and that makes viral infection of a CD impossible. The programs are so big that the only easy way to move them around is to buy the CD. People certainly can't carry applications around on a floppy disk like they did in the 1980s, when floppies full of programs were traded like baseball cards. Boot sector viruses have also declined because operating systems now protect the boot sector.

Both boot sector viruses and executable viruses are still possible, but they are a lot harder now and they don't spread nearly as quickly as they once could. Call it "shrinking habitat," if you want to use a biological analogy. The environment of floppy disks, small programs and weak operating systems made these viruses possible in the 1980s, but that environmental niche has been largely eliminated by huge executables, unchangeable CDs and better operating system safeguards.