Links to those who have been fighting the good fight:

Internet Storm Center: isc.sans.org

And to those who watch:

Internet Health Report(US only): www.internetpulse.net
CERTStation: www.certstation.com

I would also recommend a basic home computer security suite:

Avast (www.avast.com) – Antivirus
Ad-Aware (www.lavasoft.com) – Antispyware
ZoneAlarm (www.zonealarm.com) – Firewall

These programs are all free for personal, non-commercial use. While it will certainly not stop all threats, it offers decent security with a minimal maintenance burden. Use this as a starting point and select better choices based on user experience level and personal preference. I would recommend declining any paid upgrades.

For more layers of defense:

Encryption:
PGP Desktop (www.pgp.com)
PGP allows you to encrypt files and also send encrypted email. This provides excellent security against casual eavesdroppers. The trial package has limited functionality after 30 days but remains sufficient for home use.

Software proxy and onion router:
Vidalia (www.vidalia-project.net)
Vidalia will allow you to anonymously access websites. It provides some limited ability to access sites that have been blocked locally (i.e. by government or corporate mandate).

Full disk encryption:
TrueCrypt (www.truecrypt.org)
TrueCrypt provides on-the-fly full disk encryption. I will be testing the lastest version in the near future.

Network Security Operating System:
BackTrack (www.remote-exploit.org/backtrack.html)
BackTrack is filled with tools for those interested in testing their own network defenses.

You can quickly test your status using some internet-based scanners:

Symantec: security.symantec.com
Shields Up: https://www.grc.com/x/ne.dll?bh0bkyd2

For maximum effectiveness, remember to update and scan regularly!

I would also be happy to hear about any options/tools that are particularly good!