Windows has always been considered one of the most insecure of operating systems. That has to do with it's popularity but also with the way it handles many of it's programs. One of the most popular ways to hack a Windows machine is through various insecure applications, like Internet Explorer or Microsoft Word. If an attacker can successfully attack one of these programs, they can alter the operating system and get access to the whole computer. The problem is that, even if you know about all of this, it's really hard to protect yourself against these attacks because so many people depend on these programs that it's impractical to stop using them.
After listening to a recent Security Now, I heard about a program for Windows called Sandboxie. Sandboxie is a way to run these vulnerable programs in a protected area, kind of like putting your one year old in one of those large plastic fences in the yard. The program can still function normally, but it won't be able to hurt anything else outside of the "sandbox". So if IE decides that it wants to install some malware on your computer, it will only be installing it inside the sandbox, which disappears after you close IE.
The great thing is, you can have a sandbox for any Windows application you want. You can put them all in the same sandbox or even have a different sandbox for each program so they can't modify each other's data.
Install
If you're running a 64-bit version of XP or Vista, you won't be able to use Sandboxie. It appears that Microsoft has "security" features in place that prevent the use of applications like Sandboxie without giving you any good alternatives. Thanks, Microsoft!
Otherwise, just follow the easy install directions listed on the site.
Using Sandboxie
The key with Sandboxie is that any hard drive access by a program running in Sandboxie is prevented and kept local to the sandbox. So if you download a file from the internet, Sandboxie won't actually write that file to the hard drive but will keep it in the sandbox. This is important for viruses that are trying to sneak through your browser. But how do you let Sandboxie know that you actually do want to save a file to the hard drive.
In order to let certain locations on your hard drive be accessible from Sandboxie, like your downloads folder, you'll need to let Sandboxie know that it's a safe folder. You can do that by adding those folders to the Quick Recovery list. Now, when you download a file to one of these folders, Sandboxie will ask you if you want to "Recover" the file, meaning actually save it to the hard drive.
With Sandboxie, you have full control over what gets stored on the hard drive and that gives you a quick layer of defense in combating worms and viruses through malicious web sites. The only problem I see is that Sandboxie might turn into a headache with all of it's constant dialogs asking you for permission, but it looks like with the right configuration, it should make things a lot safer online. In fact, my wife has been using it for a couple weeks and hasn't had any problems with it so far.
If you decide to use Sandboxie on your computer, be sure to check out the Getting Started instructions after you install it. It runs through a quick list of what you most likely want to do.