.SQM files are created by a number of Microsoft applications, most commonly Windows Live Messenger (previously known as MSN).
According to Microsoft, SQM files (standing for Software Quality Metrics) are used as part of their "Microsoft Customer Experience Program" and help improve their products by anonymously monitoring usage habits and reporting software errors/bugs.
To stop these files being created, you will need to disable the option in Windows Live Messenger.
You can do this through the options menu, selecting the help section, selecting 'Customer Experience Improvement Program' and then ticking the 'I don't want to participate right now' box and pressing OK.
.SQM files are NOT viruses and do not contain spyware/malware and do not contain any personal information.
SQM files have a naming convention such as "sqmnoopt00.sqm". They are normally found in the root folder of your hard-drive ( C: ) and more recently, the "Documents and settings/Application Data/Microsoft/MSN Messenger/" folder.
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