Computer Viruses

How do you really know when you are protected against computer viruses?  Trojans, worms, and other malware are sneaky little ...s, and phishing scams are also hard to detect. 
I used to pay $100 each year for "reputed" protection against these insidious creatures only to, one day, find  (just when I needed it most) that my CD/DVD drive had stopped functioning.  Thinking that it was a hardware problem I adjusted myself to the fact that I would not be burning cds anymore (not that I illegally burn cds or anything...).  A month or two later, Internet explorer suddenly decided I was no longer allowed to access the Internet.  The funny thing was, I could still send and receive emails.  After weeks of agonising over "that bloody computer", calling my I.S.P., my V.P.S.P. and praying to G.O.D. I discovered that there was definitely a virus.  Despite having already paid $100 for that year's protection, I would have to pay another $140 for the same company to remotely clean out my computer.  I asked my IT friends.  They advised me to back up my files and reinstall vista.  To do this, however, required a working disk drive, which meant $150 (without labour) to get a new one installed, or $60 to buy an external drive.  With the new generation of notebooks (that had about three times as much power as my two year old beast, and at about half the price) I considered ditching the whole thing and starting again.
My financial situation made the decision for me, however, and I decided to pay for a virus clean up.  With one hopeful glimmer of wishful thinking I asked the anti-virus rep. if I had any other options.  He told me I could try calling the manufacturer of my computer and see if they could reset it to its factory default.  This would be like turning back time, restoring my computer to its shiny, younger (and lightning fast) self.  No extra software.  No downloaded extensions.  No viruses.  I followed their advice.  One hour later, my computer was back to its original self.  The disc drive was working, the Internet was functioning and my sanity had thankfully returned.  The first site I visited after months of deprivation was AVG - to download their free virus protection.  While not as comprehensive as its commercial comrades, it seems to do the trick - I have had no problems since.