A computer connected to the Internet without a firewall can be hijacked and added to an Internet outlaw's botnet in just a few minutes. A firewall can block malware that could otherwise scan your computer for vulnerabilities and then try to break in at a weak point.
The only way to make a home computer 100% secure is to turn it off or disconnect it from the Internet. The real problem is how to make it 99.9% secure when it is connected to the Internet. At the very least, computers need to have personal firewall and some anti-malware software installed and kept up-to-date to find and remove viruses, spyware, Trojans and other malware. A home network that uses a wired or wireless router with firewall features provides additional protection.
Microsoft Windows Firewall
The Vista and XP Service Pack 2 and above operating systems have personal firewalls built in that are turned on by default to block threats from the Internet. You need to leave this feature turned on until you replace it with third-party software and/or hardware. If your PC is still running XP with Service Pack 1 or lower then you need to go to the Microsoft Updates Site and run Windows update to get the latest version.
Third-Party Personal Firewall Software
These firewalls block both incoming and outgoing threats. A PC has outgoing threats when it becomes infected with a virus, trojan horse or spyware. These third party firewalls try to distinguish between threats and legitimate software. Three common ways to address this are by including a list of safe software for the firewall to check [a white list], malware to block [a black list] and/or by issuing a pop-up alert for the user asking for advice on what to do. A good free version of this is made by ZoneLabs and can be obtained by clicking here.
A hardware firewall is usually a small box that sits between a computer or network and the modem. The firewall is based either on "network address translation" (NAT) which hides your computer from the Internet or NAT plus "stateful packet inspection" (SPI) for more protection. There are a couple of basic types of hardware devices for home users, Wired Routers and Wireless Routers. They are inexpensive enough to be used with one computer and can also be used to create a home computer network. They can be used in addition to a software firewall on each computer because they run on a separate box preventing most compatibility problems.