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The Quick Answer
To answer the question "Is Stopzilla Spyware?" I think I can start off with a simple no. Stopzilla is not spyware. It doesn't fit the definition. It will not trigger true popups, plant false cookies in your system or try to steal any of your information. It is a completely legal program that does not insert itself onto your computer without permission. You have to make a conscious decision to download and operate it.
Now that that's out of the way, we can look a little closer at how Stopzilla operates and why I personally don't care for it.
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Why Stopzilla Seems Like Spyware
Stopzilla is a real antivirus program. It will also carry out actual antivirus activities. In general, it seems to be good at stopping Popups (although I have a full catalog of free programs that can do that). The problem is that it is basically one step away from being scareware. I already wrote up a quick article on scareware for anyone unfamiliar with the term. While Stopzilla isn't as bad as some of the worst pieces of rogue programs or scareware, it comes close.
Stopzilla Free operates in a pretty simple manner. It scans your system and will probably find a "threat" since even a simple tracking cookie can be seen as a threat if the settings are paranoid enough (this is at least true with most scanners). The problem is that you have to update to the professional version in order to actually use their removal tools. Nothing technically wrong with that, but it's using fear to market their product and I don't really support that. Especially when so many other successful antivirus programs don't force the customer to pay just to remove malware that it has already found.
Once again, there is nothing illegal about it. It's just really close to what scammers use with scareware. In general, the pro version doesn't seem to be spectacular. It's a removal tool. There have also been some stories about people not being able to completely uninstall it without the use of a third party uninstaller or a direct edit to the registry. Stories about computer issues are notoriously unreliable though. If I can't see their physical system I can't really confirm or deny any success stories or failures. Outside sources could be responsible for their problems. On that note, there are plenty of stories proclaiming this to be the second coming of Christ that saved their computer right alongside stories of it being a horrible piece of spyware. That does at least make me cautious though. Such a contrast usually means that a program just looks good but fails after much use, at least in my experience.
The real thing I want you to take away from this is that you don't need it. You can get the same level of protection from free software or get a really nice complete security suite for roughly the same price.
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Alternatives for Antivirus and Spyware Protection
Note that we have a lot of articles on free antivirus protection and free spyware protection. There's no sense in going into too much detail here. Just know that there are plenty of free programs that give full access to their removal tools for free. AVG Free is a personal favorite. Avast is a good antivirus program too. Avira has a very good realtime shield. Spybot Search & Destroy is still a good program for eliminating spyware on your computer and their immunization program is fairly nice.
If you're using Firefox, then NoScript is a great add-on to prevent infections in the first place. If you just want a good removal tool, then MalwareBytes is a great program with a really well proven track record for new infections.
There are also plenty of free online virus scanners. I haven't played around with those much, but they should be an option for anyone afraid that an infection slipped through and contaminated their existing antivirus software (The scanner isn't on your machine so it shouldn't be affected by existing malware).
Finally, established programs like McAfee, Norton and new favorite Kaspersky all offer a full security suite (with extras like email protection and identity theft protection alongside their scanners).
If you're running one of the free ones, then you're probably fine.
Note that we try to stay up-to-date on new infections. If you have a specific infection that you're having trouble eliminating, then just search for the name here to see if we have a guide ready.
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Image Credit: Wikipedia Commons/File Upload Bot (Magnus Manke)