Spyware used my gmail account to send thousands of spam e-mails to all my trusted contacts, what should I do?

"You did the right thing by changing your password. I'd also check that all the contact details (alternate e-mail addresses etc.) are still correct. Monitor the account closely and make sure that no one gets in again. The worst case is that you've got a keylogger installed so you might want to consider changing the password again from a different computer, and running a full scan of your machine.

As to the problem of all the e-mails sent - don't send out a mass e-mail, you'll only be compounding the problem and you might be marked as a spammer. It's important to note that most of the e-mails might not have been delivered if the various mail servers involved have decent, up to date spam and virus filters.

By all means contact the most important people individually - but it's sad to say that with all the spam going around and e-mail spoofing most people get spurious e-mails at some point."

"Apart from the fact that your account was hacked, there's the possibility that your email address is now logged in some hacker's database together with all your contacts. In that case, having closed off access to your account won't stop spam from your address from arriving, as it can still be sent from other computers and tricked-out to look like it was sent by you.

The best solution is to abandon your email address, so as to allow your contacts to add it to their black list. For all you know, some anti-spam software on their side might have already done so automatically when receiving email that's obviously spam.

The best tactic in my opinion is:

Several antivirus scans on your computer, or re-installation of Windows,
Change your email address.

If you don't like the idea of installing multiples antivirus programs, Google for ""antivirus online scan"" and use a couple of the best-known ones to scan the computer (each takes some hours to complete).
Some that I like are Trend Micro House Call and Kaspersky Labs Free Virus Scan.
Please note that they might require you to use Internet Explorer as your browser."