The default behavior of Windows Explorer, the file browser provided with Microsoft Windows, is for filename extensions not to be shown. Malicious users have tried to spread computer viruses and computer worms by using file names formed like
LOVE-LETTER-FOR-YOU.TXT.vbs. The hope is that this will appear as
LOVE-LETTER-FOR-YOU.TXT, a harmless text file, without alerting the user to the fact that it is a harmful computer program, in this case written in VBScript.
Later Windows versions (starting with Windows XP Service Pack 2 and Windows Server 2003) included customizable lists of filename extensions that should be considered "dangerous" in certain "zones" of operation, such as when downloaded from the web or received as an e-mail attachment. Modern antivirus software systems also help to defend users against such attempted attacks where possible.
Some viruses take advantage of the similarity between the ".com" top-level domain and the ".COM" file extension by emailing malicious, executable command-file attachments under names superficially similar to URLs (e.g., "myparty.yahoo.com"), with the effect that some naive users click on email-embedded links that they think lead to websites but actually download and execute the malicious attachments.
There have been instances of malware crafted to exploit vulnerabilities in some Windows applications which could cause a stack-based buffer overflow when opening a file with an overly long, unhandled filename extension.
Read more about this topic: Filename Extension
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