A hoax is a message, typically distributed via E-mail or newsgroups, which is written to deliberately spread fear, uncertainty and doubt. Just like the viruses they purport to describe, they are sent from user to user/s, slowing network and Internet traffic and causing damage 'per se', by wasting users time and by prompting well meaning, (albeit unnecessary) clean up procedures.
These messages may be regarding completely fictitious viruses and trojans, or they may be misleadingly warning users about legitimate programs (a common target of past hoaxes was screensavers and more recently, Windows utilities).
Hoaxes prey on the lack of technical knowledge and the goodwill of all those that receive a hoax. Generally, hoaxes are warnings about threats to your computer. They tend to follow a standard pattern, and should you receive an e-mail that contains the following characteristics, view it with doubt, if not downright suspicion.
Reports of a virus that can do massive damage to your pc - many even going so far as to say that critical hardware will be destroyed.
May sound unnecessarily technical (although often meaningless), thus taking advantage of many users fears of technology/the unknown.
May quote bogus announcements from Anti-Virus Industry experts, some even going so far as to provide a correct link to an AV site (which strangely enough, if visited, will most likely tell you that it's a hoax).
The message may be written in emotive language. That is, the message may be colored with upper case text and contain large numbers of exclamation marks (in order to emphasize the severity of the perceived threat and make the user more likely to forward the message).
Asks that you forward the message to as many people as possible. This is the most obvious line in a hoax. Warnings from reputable expert sources do not ask you to forward their notifications. It is this part of the text of the message in particular that should immediately make wary users skeptical.