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Let me attack this from an evolutionary sense, as I'm a biologist and it's probably the best argument I can formulate.

Any habit that is beneficial to the survival of an organism will increase in frequency in the genome over time. As your example points out, some behaviors that were once beneficial, later become less beneficial to the organism. However, if the habit is not 'bad' enough to cause survival problems, it will not phase out of the population. And with medical technology as it is, such natural processes are being disrupted. Why eat healthy when you can clean your clogged arteries?

As for other habits, since everything has some sort of genetic component, if they aid survival, they're kept I, or if they are not deterimental to survival, they are also kept. So since smoking and alcoholism do not have severe enough consequences to create mortality pre-preproduction, such behaviors persist. They are not detrimental to survival in a signifigant way. Detrimental to several things, yes. Now, if we all shun smokers and alcoholics and refuse to marry them, that'll change. Gods know I won't marry any guy who partakes in such activities. To phase out these things, we must rely on sexual selection.

These preferences change over time. And, the 'fashion' must persist long enough to have a statistically significant change in the gene pool. It's only been fairly recently that smoking has been revealed as the threat that it is, so we can't expect to see addictions like that dissapear for many, many more generations. And then there are those who aren't picky with mates... but if enough are, a shift will occur. There's more to this argument than this, but it's what my brain is managing to squeeze out for now.

allright here we go, all of these answers are expresed in my own opnions so please pick at them all you want:

1) Where do bad habits originate?
bad habits. they originate from all around us. They may be from your parents such as nail biting, or from a sibling such as cracking your fingers. But it isn't just from he people you know that are close to you, it may be from all the people you see arround you in everyday life. You may see someone in the street do somthing, shall we say "obscene" or "mismannard", and beleive it or not, you may slowly begin to repeat those things just from your mental memory of that person carrying out that action. These habits may also originate from someone influencial, like a rock and roll star (smoking) simply by seeing them doing it, you may want to immitate them.

2)Can mankind EVER overcome them?
it is a mind virus, as you say. Being a mind virus, as you have explained very well i might add, "it won't go away". it will always linger and be spread from person to person. It may lay dormant, but it will reawaken with the mere memory of it again.

3)Just by making cigarettes really expensive and eventually outlawing it, will it eliminate the habit?
simply put, no. as you said it is a mind virus. Of course if prices do raise to high, theres allways the mafia right there to lend a helping hand sadly...
Toronto (Canada) has allready began the first step to attempt to eliminate this threat. Theyve banned smoking in all public areas like bars and restaurants...just thought you might like to know...

i suppose, but smoking has been around for juat a little more than 3000 years in the americas, tobacco anyways. It wont take just a couple of years to get rid of this worldwide habit. If the human civilization did have the inititive to get rid of it, it would take somewhere in the range of 10-500 years depending on how motivated we are. You never really know.
What im trying to say is that i was a little to judgemental at first when reading this topic. Maybe the human population can over come it, you never know...not likely in my own opnion, but you never know...

Hmm...

All I can really talk about is myself in such cases...

When I am nervous... it is like a mind virus... I must seek an outlet. If I keep something in, it will manifest into something worse... as it picks up more frequency for some reason.
The usual way to do this is to bite my nails. Once I get a nail completely off... clipped... I feel better. I know it's a disgusting habbit, and I guess I work to get rid of it, but it does get rid of the need for nail clippers. xd
Other habbits is "playing pillow", where I make a triangle of some sort of cloth that is closest... then proceed to run it between my fingers. You can tell I do it to my sheet since it is dark green everywhere but where I have done that. And it happens to be where the sheets for the "right thickness" for folding and having the right... stiffness to it, if you know what I mean. (If it isn't stiff enough, then it doesn't work. Denim is somewhat good, but usually the edges of jeans are too thick. Shirts work... but cotton ones don't usually. Thus... nail biting.)

Another habbit I have is to cross my arms... behind me. I don't know exactly why I would do that, or why it bothers people so much... but sometimes I do that when I am talking, or listening.

Right now is another habbit of mind to have myself sitting on my leg. I exchange which leg I sit on... and I don't know why, but I find it more comfortable to not sit "normally".

(Not a habbit... but as of me typing up this post... I couldn't really decide, so I picked the "philosophical pole whore" option... and I am the only one to do so. ninja I meant to pick it as an "other", since I honestly don't know what to think of bad habbits. If this itself to remain undecided is a bad habbit... gonk )