Viruses are found on or in just about every material and environment on Earth from soil to water to air. They're basically found anywhere there are cells to infect. Viruses have evolved to infect every form of life, from animal to plant and from fungi to bacteria.Viruses depend on the host cells that they infect to reproduce. When it comes into contact with a host cell, a virus can insert its genetic material into its host, literally taking over the host's functions. An infected cell produces more viral protein and genetic material instead of its usual products. Some viruses may remain dormant inside host cells for long periods, causing no obvious change in their host cells (a stage known as the lysogenic phase). But when a dormant virus is stimulated, it enters the lytic phase: new viruses are formed, self-assemble, and burst out of the host cell, killing the cell and going on to infect other cells. Viruses cause a number of diseases in eukaryotes. In humans, smallpox, the common cold, chickenpox, influenza, shingles, herpes, polio, rabies, Ebola, hanta fever, and AIDSare examples of viral diseases. Even some types of cancer -- though definitely not all -- have been linked to viruses.
Viruses themselves have no fossil record, but it is quite possible that they have left traces in the history of life. It has been hypothesized that viruses may be responsible for some of the extinctions seen in the fossil record (Emiliani, 1993).
On the other hand, because viruses can transfer genetic material between different species of host, they are extensively used in genetic engineering. Viruses also carry out natural "genetic engineering": a virus may incorporate some genetic material from its host as it is replicating, and transfer this genetic information to a new host, even to a host unrelated to the previous host. This is known as transduction, and in some cases it may serve as a means of evolutionary change -- although it is not clear how important an evolutionary mechanism transduction actually is.( Source: http://www.microbeworld.org/ ; http://www.ucmp.berkeley.edu)