Thanks a lot everyone for replying, especially DavidR and Tarq57 for your detailed suggestions.
From the posts above I gathered the following:
1. Vista's own firewall is not adequate and hence I need something else. Any suggestions here about good firewalls? Anything free like avast?
2. One should run weekly scanning using Avast too. DavidR, what did you mean by default sensitivity?
3. One should have a hardware firewall. Now I do have a wireless router, but I have no idea whether it is having a firewall or not.
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You're welcome.
You could also enable the outbound protection of the Vista firewall, but it isn't very friendly, is rule based and you have to create the rules. - Vista Firewall Control, check out this topic for some user friendly help for the Vista Firewall, Outbound protection,
http://forum.avast.com/index.php?topic=30234.0- There are many freeware firewalls such as, Comodo (care required now it is a suite not to install the anti-virus element), PCTools Firewall Plus, etc. - Zone Alarm free works fine with avast and has a reasonably friendly user interface, however, the free version is becoming bloated with trial ware and is also crippled as far as outbound protection goes In the Program Control, configuration area, the slider will only goes as far as Medium protection, if you want more you have to buy the Pro version.
See A Forum discussion on free firewalls
http://forum.avast.com/index.php?topic=30808.0See
http://www.matousec.com/projects/firewall-challenge/results.php.
Many forum users are using all of the above:
PC Tools Firewall seems to have the least user headaches as it doesn't seem to be constantly asking the user questions about this and that.
I think you can see by my comments on Zone Alarm free you have to be careful that you are not using the pro trial version.
Online Armor for the most parts fine but it has caused some users grief after avast program updates and that is something you have to watch out for.
Comodo is now a suite and you have to do a custom install so as not to install the antivirus element, of all the firewalls listed this seems to be the noisiest in asking questions, depending on settings and elements used, so it could be daunting for those not to familiar with firewalls or their systems.
By default sensitivity, it means just that don't tweak any settings when you run an avast on-demand scan, it will then run on Standard sensitivity and without scanning Archive files. This still scans important files and those more prone to infection and reduces the time taken.
Your Router probably has a hardware firewall built in (if not no problem), but hardware firewalls usually don't have outbound protection (unless it specifies it does), so you would still need a software firewall to provide outbound protection.
Questions for which I am still looking for an answer:
1. Should I schedule a boot time scan using Avast?
2. Is sandboxing really needed?
Personally I would only schedule a boot-time scan if avast detects something (and it recommends doing so), which it can't deal with in normal mode.
I don't use sandboxing, but I have a robust back-up and recovery strategy in the very unlikely event that I got infected. I'm using XP Pro and with that I use DropMyRights (not available for Vista which up to a point UAC deals with) on all programs that connect to the internet, browser, email, etc. If you can run from a limited user account in Vista as that would limit the potential for damage should you become infected.