I prefer to do my own updates.
That way I don't have a false sense of security... and I at least have an inkling of what MS is pumping into my machine.
Anyhoo... you definately need a firewall of some sort. At least a software one. I am running a variation of ZoneAlarm Pro, and the hardware firewall in my modem.
I am also running MS Windows Defender, eTrust Pest Patrol, and eTrust antiVirus. I have Spybot and have immunized my system, as well as AdAware. Oh, and I also use Firefox.