Many industry experts make a distinction between the two in that the virus is dependent upon a host, such as a file or boot sector, to dispense its payload. It must rely on the transfer of files between machines to spread. A worm, on the other hand, is an independent bugger. It propagates of its own free will through network connections. The most popular misconception is that traditional viruses and trojan horses are causing the same damage.
Viruses tend to cause more inconvenience to users and organizations.
Trojan horses tend to be used to create a back door into a computer system for more malicious purposes. They can be used to gain access and to control PCs without the knowledge of their owners, for example, installing a remote access tool such as Back Orifice on an executive's PC in order to extort the company for money. Now, before delving too much further into the topics at hand, there is a caveat. In the computer virus arena, a game of semantics is always on play. Whatever slightly different means viruses, trojans and worms use in dispensing their blasts, they are all forms of malicious codes.