Buy, and frequently update, antivirus (AV) software. Failing to update AV software is probably worse than having none at all: if you have no AV then you are more likely to be careful in what you allow on to your computer. AV isn't a catch all for poor computer safety habits!
Just because you trust some people with your house key doesn't mean that they practice safe computing, or are competent in 'Malware' matters! If you don't know why they are sending you a file, don't double click on the attachment: instead, ask why it was sent. A healthy dose of paranoia, and a quick conversation with the sender could save you time, energy and frustration.
Recordable CDs are cheap, your data is not. With a CD Burner costing below 150 and the CD media less than 25 cents each, there is no reason not to make regular backups of your information. This is made easier if you store your documents in the "My documents" folder. If you say, "my data isn't important", then why are you wasting space and saving it in the first place? If it's important enough to save, it's important enough to back up.
Some viruses do damage that requires a reformat; the key is that to REMOVE the virus, no reformat is necessary. Just to use the computer normally afterwards. There has never been a virus for which it was necessary to format the computer in order to remove the virus. Also, in some cases this will NOT remove the virus: in fact, there is a whole class of viruses for which this is so. Unfortunately many shop technicians don't know much about this, so will often recommend unnecessary formatting of your disk (and loss of your precious data). Of course, if a virus has already "wiped the system" and you can't boot into your operating system (OS), then that is a different story. But still, a format may make things worse, if you have any interest in trying to recover your data. Even in these cases data can often be recovered, and formatting will only make this much more difficult. Usually such recovery requires expert help.
Learn the basics of the computer. You already know (if you drive), that you have to fill the tank with petrol (gas), change the oil, check the tires and have the vehicle serviced periodically, or it stops running. You don't have to be an expert on the internal combustion engine; you can do the simpler tasks yourself and let a mechanic take care of the more complex items. The same applies to your computer. Understand things like directories (folders) and how to tell where you're saving your files, learn how to "change the oil" by updating your anti-virus, and "fill up with gas" by defragmenting and running scandisk. By having a basic understanding of your computer, you will also better know when something is wrong, and can call the "auto club" when the "tire goes flat". If you keep the security patches released by your operating system vendor (e.g. Microsoft) up-to-date by using features such as "Windows Update" regularly, this will also reduce your vulnerability to some viruses.
Install and use a "Personal Firewall". Granted they are not perfect; granted they're easy to defeat for a determined attacker but, when used in conjunction with current anti-virus, they can increase your protection immensely. If you are on broadband, either DSL, or cable, consider investing in a "router" with built in firewalling. There are several, and run less than 200. Even if your provider doesn't permit sharing of the connection, you don't have to violate your agreement.
You can put the router between your cable/DSL modem and your PC, still be in agreement with your ISP contract, but be a LOT more secure. Just remember to keep your eye on the manufacturer's site to apply any updates, and not allow unsecured remote "updates": you may be shooting yourself in the foot if you do.
If a person tells you that you may have a virus, don't ignore it. You owe it to yourself and to your friends at least to update your antivirus software, and do a system scan. As hard as we try, sometimes things do get past our defences, and it's always better to check and be clean than to remain infected.
Don't believe everything you hear! While you may think it's nice to warn your friends and family about the latest threat, you could well be sending them a hoax; or worse, altered or incomplete information. You should subscribe to an antivirus software vendor's alert list (most of them have free email alerting services), and encourage your friends to do the same. You should never ever forward hoaxes to other people.
Not all cute things are safe. While Flash movies, games, and other little "Nifty" programs are often enjoyed by some people, it is not best or safest to send it in email. It can cause aggravation for people who are on slow dial up connections, and helps viruses spread if the file is infected. If you have something you feel your friends may enjoy, or find useful, provide a web link to the original source.
This gives your friends the option to download it, or not. It can also be safer as the originators, if they are reputable, are less likely to have an infected or corrupted version on their site. (Beware, however: they might have an infected version, or it might contain a Trojan spyware like 'Aureate'.) Likewise, if some one sends you a file, politely tell the sender you'd prefer a link to the original, if possible.
Don't share your hard drive. Disable file sharing on your hard drive - if you do need to provide some file and print sharing, don't give the keys to the kingdom; use a password, and ONLY give the minimum access that you have to. Sharing a single directory (folder) is much better than giving access to all of your drive, read only is better than full access.