I have been working in IT for the last 10 years. You need, at a minimum, anti-virus software, pop-up blocker, anti-spam, and a firewall. I like the McAffe suite, Symantec is good as well. Windows XP with SP2 has a decent (not spectacular, but decent) firewall. Microsoft updates their malicious software removal tool regularly as well. Keep your computer up to date with Windows Update (I prefer to do it manually, but automatic works fine for a lot of folks).
Don't open emails with attachments from addresses you do not recognize. Be very careful when you get a security alert from Windows telling you some web site is attempting to install software on your PC, even if the company who wrote the software has a valid security certificate. NEVER use the "always trust software from XXX company" - not even Microsoft.
All of that should help