Trojans are dropped behind your system (whether it be by you executing a infected file or a friend who wants to show you he can really hack). When you execute the program the trojan usually adds itself into the registry so it will strat up every-time you start your computer... Then like hot_ice said they listen on a port for incoming connections from the client (the person who infected you)... The worst a trojan could do to your PC is mess with system files... But you do have to know what you are doing.... If you notice something weird going on(missing files, weird processes) download Norton AV, update all the virus defenitions and do a scan on your whole computer.... Hope this helps... I hope you see how this resembles the story hot_ice posted

"The term comes from a story in Homer's Iliad, 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."