These are usually anti-spyware or security software applications that use various forms of deception and/or unethical means or show a history of negligent false positives to goad the end user to make a purchase.
In some cases these applications maybe downloaded with some form of unwanted software at which point the rogue application is offered to the customer as a way to remove the unwanted software.
SystemStable is a Rogue anti-spyware application which shows infected objects on completely clean computers. SystemStable gets installed through false Windows alert messages and false Internet explorer warnings shown by a Trojan Downloader. This Trojan Downloader also drops many files masquerading as malware files so that SystemStable can detect them to make the user believe the computer is infected in order to convince the user to buy this Rogue anti-spyware.