Since most illnesses are caused by virus and not bacteria I always though the antibacterial stuff was not much good. Is there a chemical that can kill viruses on contact that could be used as a hand sanitizer?
Soap and water is all you need. It removes all sorts of things from your hands. No need to disinfect unless you are operating.
If you are felling a little bit Howard Hughes, you can use iodine solution or something like virkon, or just wear cotton gloves.
The alcohol sanitizing solutions kill viruses, too. Alcohol is pretty strong stuff, especially when used against microscopic organisms. I mean…let’s drench you in 70% isopropol and see how long you live. 
According to the label my bottle of Purell is ethyl alcohol, 62%. If I’m recalling my high school biology correctly, it works by screwing up the osmotic balance of pretty much whatever it touches: all the little beasties on your hand, regardless of what they are, shrivel up and die.
I think that antibiotic soaps may often work differently, though I’m not certain on that fact.
You’re right about the alcohol, and also about soap. Most antibacterial soap contains triclosan. It works by inhibiting fatty acid synthesis. Bacteria use fatty acid synthesis to make cell membranes. Without a cell membrane, the cell dies. Since viruses are not cells, and thus have no membranes or any fatty acid synthesis, they are immune to it’s effect. However, as previouisly mentioned, the normal washing action of soap and water will remove many viruses from the surface being washed.
Many types of viruses (such as influenza) have an outer envelope composed of lipids and proteins that will be destroyed by alcohol. Viruses without an envelope will not be affected.
What you want is a hand sanitizer like “Purell” or one of the similar products.
Basically, these are just alcohol processed into a gel solution. Just squeeze a small amount out into your hands, rub your hands together for a few seconds until it evaporates, and you’re done!
These have been proven effective, even in a medical-care environment. They work about as well as soap, and the best thing is that people will actually use the sanitizer frequently, whereas if they have to go wash they’ll just skimp on it.
I’ve had a lot of success with getting kids to clean up using this stuff. I keep a bottle in the car to use when we get food at the drive-thru, etc.