Email spoofing is when the email header's "From:" line is modified to something other then the original sender.
One of the features of a standard SMTP server is the ability to modify the email header to be "From:" any address. This is a convenience built in so the address is easy to read (like "bob@HostMonster.com"). This feature is often exploited by spammers trying to mask where they are sending from.
When these emails are set to be "From:" an email address on your domain and bounce, they are sent to our servers trying to deliver themselves to that mailbox. Generally, you will never see these emails. However, if the spoofer happens to configure his "From:" header to be a real email box, the bounce will come back to your mailbox and you will receive the email.
The way these spoofers are tracked down is from the server that is used to authenticate from originally. That server gets reported to ISPs and Email Realtime Black Lists (RBLs) and the spoofing emails stop.
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