mnemonic,
You spoke about routers and that is something a lot of people ignore. If you get a good firewall that performs real stateful packet inspection you can circumvent a lot of the random attacks out there and then concentrate on defending on the reduced amount of crap that makes it through.
My recommendation is to visit the third-party firmware web sites for routers such as DD-WRT, Tomato, OpenWRT & find the firmware you like best. Once you've done that carefully look over your chosen firmware's list of supported routers & get buy the one that has the features you want at a price you can afford. Once you get that firmware installed you'll have a firewall appliance running Linux offering you firewall features that are usually only available on devices costing $500+ dollars.
As for security products, I can't sum it up any better than saying it's like walking a tightrope. The more features a product offers to secure your PC the more resources it's usually going to take up. KAV, for example, makes a system feel more sluggish than one running NOD32. One of the reasons this is because KAV is looking out for a lot more trojans and malware than NOD32. Even if you are fine with the resource usage of KAV, moving up to the single-stop security solution of just getting the KIS security suite isn't necessarily a no-brainer because the firewall in KIS is not as good as some offerings.
As for free anti-virus programs one has to realize that generally speaking one is going to have to put up with more false positives, perhaps reduced features, and definitely getting AV signatures at a later date than those using the paid version of the same product.
Firewall programs are not easy to choose, either. Generally, the most secure ones are the ones who offer the most granular control over your system. Unfortunately, with that granular control usually comes increased popups like with Online Armor. I understand that someone can get irritated and frustrated with all the increased questions of allow this and disallow this after installing one of those products, but you can't let it get the best of you. As long as you are telling the firewall program to remember your decisions as you progress through the popups you are only going to have to answer each of those questions once. After the firewall has been trained on all your installed programs you're only going to see a popup question once a week or two...or even less.
The security software market is unique in that you will always be better off staying away from the major market players that overflow store shelves. Keep McAfee, Norton, TrendMicro, and BitDefender off your PC and you'll generally be a happier person for it.