"Trojan Horses" are named after the fabled ploy in Homer's "Iliad". The idea is that a cracker distributes a program or binary that sounds great, and encourages other people to download it and run it as root. Then the program can compromise their system while they are not paying attention. While they think the binary they just pulled down does one thing (and it might very well), it also compromises their security.
You should take care of what programs you install on your machine. RedHat provides MD5 checksums and PGP signatures on its RPM files so you can verify you are installing the real thing. Other distributions have similar methods. You should never run any unfamiliar binary, for which you don't have the source, as root. Few attackers are willing to release source code to public scrutiny.
Although it can be complex, make sure you are getting the source for a program from its real distribution site. If the program is going to run as root, make sure either you or someone you trust has looked over the source and verified it.
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