There are 4 basic parts to computer protection from viruses and spyware:

1. Use a router.  A router will function as your gateway and firewall to the outside world on a broadband connection.  Install the router between your DSL or cable modem and your computer.  The router will prevent the outside world from seeing not only your computer, but if there is even a computer there.
2. Install Anti-Virus and keep it up to date.  For home users, AVG has a free edition that works very well.  For business users, purchase AVG Pro.
3. Install Anti-Spyware.  If you are using Vista, you already have Windows Defender.  XP users can download it for free.  I also recommend installing Spybot Search and Destroy and immunizing your system.
4. Turn on Windows Updates.  Go to Control Panel and make sure that Automatic Updates are turned on Automatic.

If you follow these steps and leave your computer on all the time so that the anti-virus, anti-spyware and Windows Updates can do their jobs at night, your computer will be well-protected.