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What are the biggest security threats to my  PC?
Security threats vary greatly depending on who uses a computer and how they use it.   Users without internet access who rarely install software should have little to worry about. Everyone else (the majority) must be careful to avoid being victimized by the huge tide of viruses, spyware and malware out there.   Here is a quick (by no means complete) list of things to be wary of:

1) The most serious security threat to your computer is probably you.   Time after time, viruses spread because people are careless or misinformed about basic PC security.   Who uses your PC and what do they do?   What software gets installed?   What web sites are visited?   Keeping track of these things is an important start.

2) Exploitable and out of date software. Don't install software you have no reason to trust and keep the software you do use updated.   Most "hacks" exploit security problems which have already been fixed, but users never install.   Set Windows Update to automatic and turn on "autoupdate" on all software which supports this.   Regularly check vendors for updates to your most used programs.

3) Spyware/Adware/Malware. For a "multimedia rich" online experience, browser plug-ins are sometimes required.   Unfortunately, some plug-ins (aka "Browser Helper Objects") can be used by web sites to install software on your machine without your knowledge.   [Have someone] set your browser security settings to the most restrictive possible settings which still allow browsing functionality.   Pop-ups and scripts should be blocked by default and only enabled if you explicitly allow them for specific (trusted) sites.

How can I secure my PC?
First, understand a PC will never be completely secure on a network.   The only truly secure environment is unplugged from the net and physically protected from any unauthorized access.   That said, you can stay reasonably safe by keeping your software up to date and installing firewall, anti-virus and anti-spyware programs.

Firewall: A firewall 'shields' your computer from the internet by blocking ports and programs from unauthorized access.   There are 'hardware' and 'software' firewalls.   A 'hardware' firewall is a dedicated box between your computer and DSL/cable modem.   If you have a router, it may act as a firewall, but check the documentation to be sure.   A 'software' firewall is a program which runs on your computer and inserts itself between programs and the network, asking your permission when a new program wants to connect to the net.   A software firewall has an advantage in that it can enforce what programs can access the internet... but unlike a hardware firewall, it use system resources (ram, cpu) to run.   While there are commercial software firewalls, many have been discontinued as Microsoft has substantially improved the built in firewall in Windows (which we recommend).

What about Norton/Symantec/McAfee?   These work and have their place, but we consider most of them over-rated bloatware with more PR value than anything else.   Recent versions of Norton, Kaspersky and bitDefender products have been improved substantially, however we can NEVER recommend any version of 'Norton Internet Security' due to its proven track record of crashing, locking up or otherwise lobotomizing PCs.

Anti-virus: Anti-virus software scans your computer for virus infected files by comparing the files on your system to known virus signatures collected by the antivirus software.   Antivirus software can (and should) be configured to run all the time and monitor files you download from the internet so it can warn you before you inadvertently run an infected file. A few good (and non-resource hog) antivirus programs are Avast, Avira and bitDefender .   Microsoft has am effective (and *FREE*) antivirus called Microsoft Security Essentials.   Note: Security Essentials is no longer available for Windows XP, but still works on Windows Vista and later.  

Again, due to numerous incidents of system corruption and failure attributable to their products, we do NOT recommend Norton, Symantec or McAfee consumer antivirus products.

* Anti-spyware: Anti-spyware software checks your computer for spyware programs and tracking information used to report your online activities to 3rd parties for marketing purposes.   It also will typically keep track of websites distributing such software and allow you to block them at the browser.

Two well known Anti-Spyware programs are Malware Bytes Anti-Malware and SuperAntiSpyware (in spite of the spammy name, it's quite good).   Both have free and paid versions.

All software should be kept up to date, but anti-virus and anti-spyware programs should be updated much more frequently (daily) in order to protect you from newly released exploits.