What is Email Spoofing
Is a technique commonly used by spammers and virus writers to hide the origin of email messages. By changing properties of the Message Header (From, Reply-To, Return-Path fields), it makes the email appear to be from someone other than the actual sender.
Non Delivery Reports (NDR)
If you receive Non Delivery Reports (i.e. undeliverable emails) for messages/or reports of viruses in messages you have never sent, this would often be a result of Email Spoofing. This can be can be triggered by the following:
Some email viruses can spread from an infected machine by copying itself in a message and then 'spoofing' the from field address using entries from the local address book. If the message fails to deliver, this can cause a Non Delivery Report (NDR) to be sent back to you as the supposed sender.
A common technique used by Spammers to make their SPAM appear legitimate would be to forge the from field address using your email address from which to send out SPAM. Normally the address would be chosen at random by a spammer's web-crawler and does not necessarily mean that the account has been compromised. Again if the message fails to deliver, a NDR may be sent back to you as the supposed sender.