hi
i've read your post and i found it very interesting. i'm not going to raise any objection about your explanations, i just want to add some ideas on how to secure the system with restricted resources (i.e. cash and hardware

).
my current system is an old age toshiba satellite with intel P2 233mhz, 64mb memory and 4 GB harddisk. my current os is win 98se (i've installed the unofficial service pack 2.1 for this os) since i can no longer use win xp (my xp has left me, along with my old 1GHz toshiba satellite

)
for the people with limited cash and hardware specs like me, i need to dance with carefull steps, lest i'll crashed down my system or even worse my pocket

.
most of my sofwares are freewares, and you know the risk attributed to freewares. but don't worry, we got so many people arround the world who are eager to help us ini securing our system for free. my methods in doing this are :
1. Using the least resource utilization free anti virus software (i only have 64mb of memory), but the av must have a good protection level against viruses, and i found that clam av doing the job very well (it works passively, we only need to TURN OFF the autorun for cd and flashdrive, and scan them manually)
2. Using the tiniest possible (but still with reasonable level of control and protection) free firewall program, and i found that tpc (tiny personal firewall) is a good bet for this (you can download this from oldversion.com)
3. Sending every freeware i've downloaded from suspicious sites to the online free virus scanning service (the people at clam av or comodo or other sites can do this)
4. As for anonimous surfing, i only use proxo with default configuration (we don't realy need to modify the config). well, not realy anonimous, but at least we don't spill out too much information
that way my good old toshiba with win98se can run smoothly and (up till now) safely.
best regards