A rootkit is a tool that can distort Windows' most basic operations to hide itself. A rootkit can make Windows hide the programs it runs. That means anti-virus and other security programs can be fooled. Even if you know what files to seek out, Windows may not acknowledge that they're on your hard drive.
Rootkits also can be used to hide worms and other malicious programs. That's why they are normally considered malicious. The worst damage is done when a rootkit is used to create and hide a hacker's control of your computer.
Most antispyware programs will detect a rootkit. But if the program you are using does not, try Rootkitrevealer and find out what's hiding on your computer.