Although I remain sceptical that the threats from computer viruses are quite as serious as the software suppliers would like us to believe - I know of a number of PCs that are still happily virus-free although their anti-virus software is years out of date - there seems little point in not protecting your computer when high-quality products are available for free.
When PC Pro magazine last tested antivirus software in July 2007 - read [this article] - their top four included two paid-for products and two free products. It is worth noting that the two best-known retail products, from McAfee and Norton, are both poor performers compared with the two best free products.
When PC Pro magazine last tested internet security suites in December 2007 - read [this article] - it was noteworthy that the two best-known retail products, from McAfee and Norton, were only average performers. Norton products, in particular, are notorious as heavy users of computer resources and this was certainly my experience when using Norton Internet Security 2007, followed by Norton 360, both of which noticeably slowed-down an ageing PC.
Although the non-technical user may gain confidence by using these brand name all-in-one products, many of the more technically-aware prefer to use one of the simple stand-alone anti-spyware products, such as Lavasoft's Ad-Aware (free) or Webroot's Spy Sweeper, in combination with a degree of common sense when using the internet.
I use and recommend Avira AntiVir Personal Edition Classic - one of the free ones - primarily because it is a very "light" application with no noticeable effect on computer performance. I run full system scans monthly.
I use and recommend Ad-Aware 2008 Free for spyware detection, used in conjunction with Windows Firewall and the hardware firewall in my wireless router(s). I run full system scans monthly.
I turn the Internet Explorer "Phishing Filter" off to speed download times and rely on common sense. So far so good!