I've been using Windows 7 since January. It is a big step up from Vista and I could never go back to XP. I have not used IE for years. Firefox all the way. At the very least, the fact that Firefox does not support ActiveX should be THE reason to use it instead of IE. ActiveX is IE only and it is a security nightmare.
Isberian, I assume you know enough not to get into trouble and not installing updates may be fine for you but the average user should ALWAYS install security updates. They patch major vulnerabilities that allow a malicious site to take over a machine without any interaction from the user and not installing updates is just inviting viruses and spam bots into the average users machine.
I know how not to get bitten but I still install updates. I have never had any issues, though I have not run XP for a couple years. I do not run antivirus software, however.
1. Don't forget that updates can create other vulnerabilities.
I advise any computer user to allow an expert to handle security updates, anti-virus and program installation. If such a person isn't available then feel free to ask Nemo, myself or any other techie here for advice.
2. I suggest a manual update of commonly used software every couple of weeks.
3. For anti-virus, firewalls and spyware you should always keep your computer updated.
4. Most importantly back up your important files. Store non system files on a separate partition so you can easily reinstall windows without losing your data. This is by far the best method of defense.
5. Windows now has the restore feature. This should be enabled and can be used if something bad happens. Basically it will revert your configuration to a previous state. I've used this a couple of times myself.
I may run my machine very lean to maximize it's performance. I also don't got to naughty websites with it. Every person has different requirements for a machine. My requirements are speed and stability. I wouldn't recommend my configuration to most folks at all.
Windows is a lot better than it used to be, but it's still not perfect. No software is.