Software-based keyloggers

These are software programs designed to work on the target computer’s operating system. From a technical perspective there are five categories:
Hypervisor-based: The keylogger can theoretically reside in a malware hypervisor running underneath the operating system, which remains untouched. It effectively becomes a virtual machine. Blue Pill is a conceptual example.
Kernel-based: This method is difficult both to write and to combat. Such keyloggers reside at the kernel level and are thus difficult to detect, especially for user-mode applications. They are frequently implemented as rootkits that subvert the operating system kernel and gain unauthorized access to the hardware, making them very powerful. A keylogger using this method can act as a keyboard device driver for example, and thus gain access to any information typed on the keyboard as it goes to the operating system.
API-based: These keyloggers hook keyboard APIs; the operating system then notifies the keylogger each time a key is pressed and the keylogger simply records it. Windows APIs on such as GetAsyncKeyState(), GetForegroundWindow(), etc. are used to poll the state of the keyboard or to subscribe to keyboard events.These types of keyloggers are the easiest to write, but where constant polling of each key is required, they can cause a noticeable increase in CPU usage, and can also miss the occasional key. A more recent example simply polls the BIOS for pre-boot authentication PINs that have not been cleared from memory.
Form grabbing based: Form grabbing-based keyloggers log web form submissions by recording the web browsing onsubmit event functions. This records form data before it is passed over the Internet and bypasses HTTPS encryption.
Packet analyzers: This involves capturing network traffic associated with HTTP POST events to retrieve unencrypted passwords.