The software available for free downloads on the net is licensed in a number of different ways. "Shareware" licensed programs (sometimes referred to as "Free To Try", "Free Trial" or "Try Before You Buy") offer you a fully functional trial for a limited period of time (typically 30 days). Since you've tried a shareware program, you know whether it will meet your needs before you pay for it. If you like a shareware program and want to continue using it after the end of a trial period, you have to purchase the full unrestricted version. If on the other hand you do not wish to keep the software, you can just uninstall it.
Freeware programs are completely free to use and keep. They are either distributed for the love of humanity, for fame, or as stripped down versions of programs that do cost money. Always check the license agreement if you consider using the freeware application for anything than your personal use.
Adware (advertising supported software) is a product that does not require any payments but in exchange displays ads on your PC. Instead of you having to pay for the software, the company creates revenue by bundling ads in the software product.
Demo programs are usually meant to give you a small taste of a large program. They usually contain only selected parts of the program while giving you ample functionality, allowing you to decide if its fully functional version (usually provided as a separate download that can be accessed after purchasing the software) will suit your needs.
Commercial software is software being developed by a business which aims to make money from the use of the software. In most of cases it is a demonstrational copy released by the manufacturer to entice customers to buy their product. A commercial demo will usually only work for a short period of time and/or have certain functions disabled.
Spyware is software that hides itself somewhere on your computer monitoring the behaviour of your activity on the web and passing this information on to advertisers. Spyware is often installed onto your PC when you download and install other software published as "Freeware" or as "Adware". It is strongly recommend that you read the end-user license agreement very carefully before you install any program. Often buried in the licence agreement will be a disclaimer saying that information about you and your browsing habits will be sent to third party advertising company.
Malware (for "malicious software", syn. "Badware") is software designed to infiltrate or damage a computer system without the owner's informed consent. It includes computer viruses, worms, trojan horses, spyware, intrusive adware, and other unwanted software. Malware should not be confused with defective software, that is, software which has a legitimate purpose but contains harmful bugs.