What is it?
Machine Debug Manager - mdm.exe

What does it do?
mdm.exe - Below is a direct quote from Microsoft found on THIS page:

The Machine Debug Manager, Mdm.exe, is a program that is installed with the Microsoft Script Editor to provide support for program debugging. The Microsoft Script Editor is included with Microsoft Office 2000, and also can be obtained from the Microsoft Windows Update Web site.

The Machine Debug Manager runs as a service and is loaded when your computer starts. If you do not use your computer for debugging purposes, you can safely turn off the Machine Debug Manager.

This is the user shell, which we see as the familiar taskbar, desktop, and so on. This process isn't as vital to the running of Windows as you might expect, and can be stopped (and restarted) from Task Manager, usually with no negative side effects on the system.

Unless you're a code monkey doing some debugging turn this sucker off!

More Info
More Info

Virus Precaution:
The original file from Microsoft gets placed at C:\WINDOWS\System32\mdm.exe . if you find it anywhere else then you should be suspicious for sure.

You'll want to keep an eye on this google search for any known viruses. At this time I have not found ANY viruses that run themselves using this filename. All of the results currently affect this file in some way, but do not actually run as this filename.

More files in this category:

lsass.exe | alg.exe | Svchost.exe | csrss.exe | Spoolsv.exe | wowexec.exe | Smss.exe | wuauclt.exe | ctfmon.exe | dwwin.exe | wmiprvse.exe | Winlogon.exe | msmsgs.exe | rundll32.exe | wisptis.exe | mdm.exe | cidaemon.exe | wscntfy.exe | Winmgmt.exe | msdxm.ocx |