The Watching hoax is a variant of the Wobbler Hoax. The hoax is similar to the following:
Subject: FW: VIRUS
IMPORTANT, URGENT - ALL SEEING EYE VIRUS! PASS THIS ON TO ANYONE YOU HAVE AN E-MAIL ADDRESS FOR. If you receive an email titled "We Are Watching You!" DO NOT OPEN IT! It will erase everything on your hard drive. This information was announced yesterday morning from IBM, FBI and Microsoft states that this is a very dangerous and malicious virus, much worse than the "I Love You," virus and that there is NO remedy for it at this time.
Some very sick individual has succeeded in using the reformat function from Norton Utilities causing it to completely erase all documents on the hard drive. It has been designed to work with Netscape Navigator and Microsoft Internet Explorer. It destroys Macintosh and IBM compatible computers. This is a new, very malicious virus and not many people on your address book will know about it. Pass this warning along to EVERYONE in it and please share it with all your online friendsASAP so that this threat may be stopped. Please ignore any messages regarding this hoax and do not pass on messages. Passing on messages about the hoax only serves to further propagate it.