the viral marketing ideal is this: every user you bring to your site in turn, on average, brings at least one more user to the site. then the site spreads, like a virus, and there's expotentially growth. in theory it never works like that; it never grows expotentially forever. however, the goal still remains a valid one; the idea is for your users to spread your site along for you and bring more traffic to you. good examples of sites that have gone viral to one extent or another: freeipods (affiliate program for the masses), myspace (look closely at the signup process and you'll see what I mean), youtube (easy copy/pastable content to host on your own site that will bring users back to their site), etc.
Agreed, a viral site is one that lends itself to be sent to another user. Any site that you see and think, "I've got to send this to someone" and you immediately send the link is viral. Viral sites are 'contagious'.
And a classic example of viral would be Hotmail, in that everytime you send out another mail to someone new it spreads. Or electronic greetings etc
Indeed... Hotmail seems to be the most popular use of explaining Viral Marketing. They stuck a Signature in the bottom of each email that was sent out that said "Free Email Account" yada, yada and people eventually signed up. Another Example would be MySpace.com ... everybody slowly jumped in and then it took off like a wildfire with Santa Ana winds behind it. YouTube.com is by far the best example for todays Viral Marketing. Look into each of those and you'll see how they used old fashion Viral Marketing to help their Sites take off quickly