Klez is a mass mailer, as you have observed, it spreads, infects other files, corrupts files and ultimately causes much system instability. I'm sure I've seen klez ultimately it destroy data on customer's HDDs; When it is finally triggered to be destructive, you get a colourful screen spewing garbage ascii on bootup and it basically sits there corrupting your drive, I think, but this is from symantec (there are many varients of Klez, this is one of them):
"Payload: This worm infects executables, by creating a hidden copy of the original host file, and then by overwriting the original file with itself. The hidden copy is encrypted, but contains no viral data. The name of the hidden file is the same as the original file, but with a random extension.
* Large scale e-mailing: This worm searches the Windows address book, the ICQ database, and local files for email addresses. The worm sends an email message to these addresses with itself as an attachment.
* Releases confidential info: Worm randomly chooses a file from the machine to send with the worm to recipients. So, the files with the extensions: ".mp8", ".txt", ".htm", ".html", ".wab", ".asp", ".doc", ".rtf", ".xls", ".jpg", ".cpp", ".pas", ".mpg", ".mpeg", ".bak", ".mp3", or ".pdf" would be attached to the email messages with the viral attachment."
