Before continuing with the free security applications, I just want to mention Kaspersky Lab Internet Security 2009, which is a full security suite which has some very good user reviews on PriceGrabber.com. It also has anti-spyware and malware protection.

There are a number of anti-spyware programs available for free. One of the most popular is Ad-Aware 2008, which was one of the first applications built to find and remove adware and spyware (of course, it was an earlier version than the 2008 version!). The free version of Ad-Aware 2008 is available at lavasoft.com. There is also a paid upgrade available, which adds an antivirus and other features.

Another free anti-spyware program is Spybot - Search & Destroy 1.6. It also has been around for a number of years.

Then there is Spyware Terminator (currently at version 2.3.0.487), which also includes an anti-virus. I’m not so sure about using this as your anti-virus protection, I would recommend turning off the antivirus feature and using other antivirus. Remember that only one anti-virus program should be running on your PC at one time. As for anti-spyware, experts tend to recommend at least two – one paid version and a free version.

And Malware protection? According to Wikipedia, “Software is considered malware based on the perceived intent of the creator rather than any particular features. Malware includes computer viruses, worms, trojan horses, most rootkits, spyware, dishonest adware, crimeware and other malicious and unwanted software.”
So most anti-spyware and antivirus programs would also deal with malware in one form or another.