Type 2: Stored XSS (or Persistent) - The application stores dangerous data in a database, message forum, visitor log, or other trusted data store. At a later time, the dangerous data is subsequently read back into the application and included in dynamic content. From an attacker's perspective, the optimal place to inject malicious content is in an area that is displayed to either many users or particularly interesting users. Interesting users typically have elevated privileges in the application or interact with sensitive data that is valuable to the attacker. If one of these users executes malicious content, the attacker may be able to perform privileged operations on behalf of the user or gain access to sensitive data belonging to the user. For example, the attacker might inject XSS into a log message, which might not be handled properly when an administrator views the logs.
Type 0: DOM-Based XSS - In DOM-based XSS, the client performs the injection of XSS into the page; in the other types, the server performs the injection. DOM-based XSS generally involves server-controlled, trusted script that is sent to the client, such as Javascript that performs sanity checks on a form before the user submits it. If the server-supplied script processes user-supplied data and then injects it back into the web page (such as with dynamic HTML), then DOM-based XSS is possible.
Once the malicious script is injected, the attacker can perform a variety of malicious activities. The attacker could transfer private information, such as cookies that may include session information, from the victim's machine to the attacker. The attacker could send malicious requests to a web site on behalf of the victim, which could be especially dangerous to the site if the victim has administrator privileges to manage that site. Phishing attacks could be used to emulate trusted web sites and trick the victim into entering a password, allowing the attacker to compromise the victim's account on that web site. Finally, the script could exploit a vulnerability in the web browser itself possibly taking over the victim's machine, sometimes referred to as "drive-by hacking."
In many cases, the attack can be launched without the victim even being aware of it. Even with careful users, attackers frequently use a variety of methods to encode the malicious portion of the attack, such as URL encoding or Unicode, so the request looks less suspicious.