What is the NT AUTHORITY\SYSTEM user?

Today I installed Windows 7. After installing everything, I looked in the task manager and I saw that some processes have NT AUTHORITY\SYSTEM as the username. I searched to see what it is.

I found on some sites that a virus causes this (msblaster), on others I found that it is some sort of user, and I didn't know what to believe.

LocalSystem account is a built-in Windows Account. It is the most powerful account on a Windows local instance (More powerful than any admin account). It is part of NT Authority\SYSTEM. See comment from Heinzi below.

Most of the System level (Windows Services) services and some other 3rd party services run in the account. You do not have to worry anything about it.

In addition to LocalSystem, there are two more widely used system accounts: LocalService and NetworkService. These are built-in accounts with lesser privileges.