I've spent many afternoons removing McAfee and the like from computers that came with it "for free".
Until a year or so ago, I used AVG Free. Then they did something to the "engine" that slowed it right down, and I switched to Avast Free, which does a superb job. As others have said, you have to be determined that you want the "free" version and that you don't want any of the other offers that will be thrust at you. Watch out, in particular, for browser toolbars that they offer.
The various antivirus offerings leapfrog each other in scores - I don't think any of them are particularly bad, but I wouldn't pay good money for McAfee. None of them is 100% so you need to be wary of websites you don't know.
Apart from that...
The Windows 7 firewall is OK (ZoneAlarm is better, but a right pain until it's set itself up with the various stuff you use).
NoScript in your browser is essential, and is a bit of a pain till it's learned the sites to allow. You get used to its warning bar and having to click "Temporarily allow all this page".
WOT (Web of Trust) will protect you from norty websites that might try to upload stuff. It gives nice, clear warnings.
AdBlock Plus does a sterling job.