A device driver is a program that controls a particular type of device that is attached to your computer. There are device drivers for printers, displays, CD-ROM readers, diskette drives, and so on. When you buy an operating system, many device drivers are built into the product. However, if you later buy a new type of device that the operating system didn't anticipate, you'll have to install the new device driver. A device driver essentially converts the more general input/output instructions of the operating system to messages that the device type can understand.
Some Windows programs are virtual device drivers. These programs interface with the Windows Virtual Machine Manager. There is a virtual device driver for each main hardware device in the system, including the hard disk drive controller, keyboard, and serial and parallel ports. They're used to maintain the status of a hardware device that has changeable settings. Virtual device drivers handle software interrupts from the system rather than hardware interrupts.
In Windows operating systems, a device driver file usually has a file name suffix of DLL or EXE. A virtual device driver usually has the suffix of VXD.