What is an Exploit?
An exploit is an attack on a computer system that takes advantage of a particular vulnerability that the system offers to intruders.
Hackers will find vulnerability within an application such as a browser or on an Operating System and create an exploit to use the vulnerability to attack your computer.
The application developers (such as Microsoft) will issue a "fix" or patch in response to a vulnerability and many times will issue a fix prior to an exploit being created. But since users usually do not know that they are responsible for obtaining the patch, hackers will exploit the vulnerability to target those people.
How can I protect my computer from them?
The best way to protect your computer from hackers and exploits is to be aware of vulnerabilities.
Total Defense Antivirus and Total Defense Firewall combined will protect you from both viruses and exploits. Also, many exploits can be detected and cleaned by Total Defense Antivirus alone.
Another way of keeping up to date with your Windows Operating System is to go to Start>Windows Update. This will take you to the Microsoft Update site where critical updates will be posted for downloads. The good thing is that it will scan your computer to find the vulnerabilities and patch them right away. Here is a quick link to that site: http://windowsupdate.microsoft.com/