I work in IT and we get our hands on alot of really really badly infected machines in the course of any given work week. The only true way to keep a computer safe on the internet is to never connect it. I believe there were studies done, the results of which said that a computer running windows XP without any antivirus or security software was bound to be infected within 20-25 minutes of being turned on.
One major problem is that people go around using an Administrator account to browse the internet, and have either no knowledge of the Principle of Least Privilege, or no respect for it. This states that you should only use an account with the minimum necessary permissions to do what you're doing. So, just make two accounts: One to manage the properties of your system when you need to make changes, and the other to use when you're just messing around online or gaming. Simple as it sounds, this change can increase your safety by several orders of magnitude. Windows 7 and Windows Vista both have something called User Account Control which helps to enforce this, but its still not perfect, and there are still ways around it.
Personally, i have a knowledge of the threats out there and just stay away from sites which offer me free expensive technology if i take a survey, offer to give me an "Obama check" to stay at home and do nothing... But i still use software to stop my computer from trying to make decisions for me, and making the wrong ones.
If you were to go to one of the big ISP companies that is out there and ask "Which Antivirus software do you prefer?" they would list thirty or more scanners which run simultaneously. No one is perfect. I cant afford to sacrifice that much performance on my computer, but i do run two simultaneously. Don't take this as me suggesting you go out and download as many antivirus softwares as you can. Certain softwares conflict. I found that using AVG Free Edition in combination with Microsoft Security Essentials, I rarely have to be concerned with virus and malware threats.
The other thing is... DON'T USE P2P! This means no Kazaa, Morpheus, bittorrent, bearshare, emule, edonkey, or any of the other hundreds of programs/networks out there.
Yes yes yes, there are legitimate legal uses for it... but its in the top three causes of infections which people get. Yeah, that new movie that just came out and you downloaded in 30 segmented RAR files? No, thats not the movie, its a bunch of viruses.
I would say the top three causes of infections are, in no particular order:
-Clicking things that you shouldn't click
-Downloading things on P2P without knowing where they actually came from
-Opening email attachments without looking at them carefully.
If you are unsure about something, the safe choice is generally to not open or click or download whatever it is.... and thats a great way to avoid infection.
With wireless security, just like any security, its a door. If someone wants in, they are going to kick it down, or otherwise circumvent it. So, yes, as some other folks have said in this thread, hiding your SSID is largely useless, as anyone with any skill or intent can find your network anyways.
And encryption can always be broken, with a little patience and the right tools.
But nonetheless:
WPA2 > WPA > WEP
Change your passwords regularly. Not just your wireless keys, but your email passwords, your banking passwords, your computer passwords, everything.
While yes, a password with caps and lower case, letters, numbers, and symbols is harder to guess, choosing a ridiculously long password is not helpful. If you need to write it down to remember it, chances are you're going to hide it near your computer - a bad idea.
So pick something as randomly as you can - maybe make yourself an acronym or mnemonic. Toss in different cases, maybe an exclamation mark and a number.