I've used AVG for a few years now and I've been quite happy with it. AVG 8 was a pretty big improvement over the previous version: the UI's a lot better and updates happen in the background (7 would pop up an obnoxious dialog while updating). Free, no pop up ads (Avast's free edition has the occasional pop-up ad).
I did not, however, get bitten by the bug where AVG detected user32.dll as a virus and quarantined it (must have missed that update). Kinda makes me reconsider using AVG, but I don't want to spend money on anything else (although NOD32 seems like it might be worth it).
I'm quite firmly in the "antivirus is essential on any PC" camp. I've never downloaded any viruses or anything (I'm careful about what I download), but I almost got a virus from a flash drive a few months back (my own flash drive, even-- the virus was dumped on it by a kiosk at a photo printing place). Thankfully, AVG detected it before it ran... otherwise, I'd have had a nice mess on my hands.