UPDATED ON: October 30, 2010
The main purpose of Autorun feature is to provide a software response to hardware actions that you start on a computer. Autorun has the following features: Double-Click, Contextual Menu, AutoPlay.
These features are typically called from removable media (flash-drives, portable drives, card readers and other gadgets). During AutoPlay, the Autorun.inf file from the media is parsed. This file specifies which commands the system runs. Many companies use this functionality to start their installers.
In versions of Windows that are earlier than Windows Vista, when media that contains an Autorun command is inserted, the system automatically executes the program without requiring user intervention. Because code may be executed without user' s knowledge or consent, users may want to disable autorun feature because of security concerns.
Removable USB/thumb drives use the Autorun feature to load files when the drives are plugged into the USB port. Virus & malware exploits the Autorun feature to spread from thumb drive to PC. You can disable the autorun feature to prevent malware from spreading.
Windows 7: The new security features of Windows 7 will not run autorun programs unless it' s on optical media. These commands are still available for CDs and DVDs in Windows 7, but not for USB sticks.
Disable Autorun is a totally portable application, meaning that you can put it on any USB stick and run it directly from there.