To tell you the truth, you will be MUCH more safer with Firefox, regardless of Ad-watch.
would like to know how I can stay protected from spyware and viruses
Well to tell the truth, thebest thing is using common sense when browsing. No clicking on popups, no irrational downloads, no porn. ;)
However, on the software side of things, you're so-so. I see you have Ad-Aware. In my personal opinion (and my specialty is spyware) I would strongly reccomend switching to Ewido, as it has a higher virus-detection rate. Even when the free trial runs out on the download, it it still very active, just you have to update definitions manually.
Secondly, always be sure to browse with an AntiVirus and a firewall. Also, I see that you're running Norton Internet Security. While this isn't the best AV/firewall combination, it is halfway decent. If you ever wanted to upgrade (like when youre contract is over, for example), I would reccomend either AVG or Avast! as an AV, and either Sunbelt Kerio or ZoneAlarm as a firewall. All of these are free.
And that's about it. If ya have any more questions, just post back.
Thanks. :)