Spyware is the term used to refer to tracking software that was disguised for some legitimate purpose or for legitimate software that had hidden tracking abilities. The point of the name was that it would 'spy' on your Web surfing habits and report the results back to the developer. Sometimes, data theft trojans and backdoor trojans are erroneously referred to as spyware, but this is incorrect use of the term. Today, when you see a product advertised as "spyware software" it is almost always what is known as scareware.
Scareware, aka rogue scanners, are a category of scam software that masquerade as antivirus, antispyware, or other security software. These bogus products claim the user's system is infected in order to trick them into paying for an alleged removal tool. In fact, the system isn't infected (or at least not by what the scareware claims). Not only do the scammers collect the victims' money, they may even steal the credit card information used to make the purchase.
Before using or purchasing any product labeled as 'spyware software', use your favorite search engine to research the company and product to ensure it's actually legitimate security software. If there's any doubt, choose a different program from a known, reputable vendor. Today's antivirus scanners include spyware detection. See Top Windows Antiivrus and the Mac Antivirus Reviews for best-in-class choices.