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Cheating comes in many shapes and forms. The most commonly complained about are wall hacking (the ability to see through walls), and aimbotting (making the computer aim for you).
Well originally people said it is impossible to cheat in CS. And it was true. Then discussions started got going, and some ideas appeared on how a cheat could be made. Then somebody thought they would make one, just to see if it was possible.
It was. This first aimbot gave the players coloured models and centre section of the screen for these colours. When the colour was found then the mouse was moved to that location. This cheat was a bit pathetic, and any half-decent gamer could out perform these cheats... (well... I could).
Cheats then got better and better, with more features and more variety. It peaked with Half-Life Hacked or OGC. These cheats tapped into the game and intercepted game information, like position of the other players. Their abilities were amazing. Along with the now common open gl hacks (making walls transparent), there were a host of handy features. Such as a radar showing enemy positions, wireframing models. Highlighting models. Targeting for different parts of the body, automatic lock-on range... the list goes on. Heck there was even a game of Tetris built in to play while you were dead.
As server admins could not spend every waking hour patrolling server to look out for them some software had to be made. We first saw PunkBuster come into play. This was a program that the server, and all the clients had to have. It checked the client's computer for cheat files, and checked their config files against the server's list. If there was anything wrong the player would be banned.
Then we had CS Guard, now known as HL Guard. This was the best yet. Entirely server side, meaning anybody could play. This tool would scan your hard drive for cheat files. As well as your config settings. Plus it was updated on a regular basis. Every time a new cheat was released, it wouldn't take long before a new patch was out to stop it. There was also Cheating-Death which created a layer between the interface and the game. Removing anything that doesn't need to be there, effectively stopping cheats like OGC from getting the data they need. But this requires client side software too, so it didn't take off.
Eventually after much complaining Valve (the developers of Half-Life) created a new system which updates itself automatically to detect cheats and store their details centrally. This when in full swing will ban the person from every Half-Life server on the Internet. Very good at detecting aimbots. Used with HL Guard almost all cheats are unusable.
Unfortunately the biggest problem with cheating is not the cheats, but the paranoia that effects all the other gamers. A lot of players are more than happy to accuse somebody of cheating and heavily insult them just because they cannot accept loosing. There are players out there who have been playing for aeons, and know every detail of the game, and how they work. I personally spend a lot of time looking at walls and tracking players through them. Wall hacks? No, just a good way of tracking sounds - keep the sound in your centre speaker. I have been accused of cheating a zillion times. Sometimes it's just me being lucky and looking like a complete cheat. Most of the time it's people not being able to accept that there are better players out there. I have personally been playing CS for a very long time, this has gained me valuable experience.
If you defiantly think somebody is cheating then either change server, or try to find an admin for that server. There are thousands of servers out there. There is nothing stopping you from changing to another one. If you find too many cheats, perhaps you should spend some time trying to get better at the game, as there aren't actually that many out there.
In the past 10 months I have personally seen and banned a grand total of 6 cheats. And I play more than most. I have suspected loads of people of cheating, but almost always it turns out to be a better player.