2) If my internet mail account is with Hotmail, Hotmail scans all mail with their virus protection. Enabling it on my PC is just redundant correct?
Maybe... If you can trust in Hotmail scan...
Hotmail/Yahoo is not a pop3 email service (unless you pay for pop service), it is web based (so the Internet Mail provider doesn't directly protect it). Web based email is simply your email being viewed in the same way you browser the internet. The pages (that display your email) are downloaded into your Temporary Internet folder, just like regular web pages and displayed on your browser screen.
3) How does Webshield and Netshield differ? If my resident Standard Shield is running, it should stop all viruses coming from the web and/or net once they hit my PC right?
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Standard Shield will scan your files (as they are downloaded into your Temporary Internet folder) when sensitivity is set to High. You can round this 'problem' using 3rd party applications to download the Hotmail messages through the pop3 server (PopHotmail, for instance).
Network Shield is a protection against known Internet worms/attacks. It analyses all network traffic and scans it for malicious contents. It can be also taken as a lightweight firewall (or more precisely, an IDS (Intrusion Detection System). Network Shield protects you from internet worms that spread themselves via various security holes in your system. Typicaly these kind of viruses don't infect files but instead they attack running processes on your PC (either Windows components or some server programs like SQL Server, IIS etc.). These kind of attacks are not easily catched by ordinary antivirus during file or mail scanning.
It is not a duplicate work with Standard Shield.Web Shield analyses all traffic passing thru a HTTP connection (between your browser and an Internet server). This includes scripts embedded in HTML pages.
Just setting the Standard Shield to High sensitivity (resident filesystem scanner) won't solve... It will be too late. Vlk wrote in Wilders forum:
The thing is, a HUGE number of today's malware takes advantage of various exploits in web browsers (most notably, IE). The same applies to nuisance like dialers, spyware etc. In such a case, howevers, scanning of network streams (http streams in case of Web Scan-ners - i.e. avast's WebShield or Nod's IMON) is the only way to prevent the infection. The filesystem based scanner will simply act too late...