Tip: If you have high speed Internet and you don't have a router or other physical firewall device, you are running at serious risk. Go buy a router!! Here's a story about how a simple OS installation turned out to be a nightmare...
My wife and I took a trip out east for my Mother-in-Law's 60th birthday. Anytime she was in our province, she'd always talk about her computer with such disappointment and how I should come out to fix it someday. Well, when I learned that their machine was completely unstable on Windows ME (gawd help me) and their tech-friendly neighbour downgraded them to Windows 98 (holy crap!) -- I knew I needed to help.
So I looked into buying a copy of XP. Strangely, an upgrade is $230 and an OEM copy is $110. The catch is that you have to buy a motherboard in order to qualify for the OEM version -- no exceptions. Even if I bought a cheapo motherboard it would still work cheaper than the upgrade. Hey Microsoft -- fix your pricing, that's stupid.
So instead of purchasing a new version, I decided that my aging computer that I haven't hooked up since we moved into our house a year ago was officially retired -- I could donate that copy to my Mother-in-Law without violating any licensing agreements.
I bought a cheap 80Gb hard-drive for $50 (+ tax, grrr) on the day of my flight out and committed to installing the new Hard-Drive and OS while I was there. The installation turned out to be the most-complicated OS install I've ever performed.
I learned that there must have been some serious security improvements to XP since the first release of the OS -- I received my copy the week XP was launched so a fresh installation needs a zillion updates. I also learned that either the high-speed Internet provider out east could care less about mitigating hackers or I just didn't realize how effective my Linksys Router is.
I ended up installing the OS three times:
The first install went flawlessly -- I kept the Internet connection unplugged until it was ready to download updates. As soon as I started up Windows Update, the initial fix (the background intelligent transfer service BITS upgrade) took forever to install. About twenty minutes in, I realized that some hacker had compromised the machine and in place of the BITS upgrade, a Trojan had been installed with the same name, and the root of the hard-drive was filling up with garbage files and executables, pop-up messages were launching: this pc was now a honey-pot for hackers. In frustration, I put the installation CD back in and rebooted -- screw this!
I wised up for the second installation and took some additional security steps. I changed permissions on the hard-drive, disabled simple sharing. I thought I turned off "File and Printer Sharing" but an hour later, I was screaming politely (in front of my father-in-law) and rebooted with the installation CD.
The third installation, I needed help. I borrowed a neighbour's DLink router and magically all the hacker non-sense stopped. Before I left Nova Scotia I convinced my father-in-law that they absolutely needed to have a router.
Looking back on it -- they claimed they had serious problems with Windows ME but fewer problems with Windows 98. Though I'm not sure how to qualify "fewer" because when I was backing up data for the re-installation their machine would crash two/three times per hour. In a way it was comical because each time it crashed my not-so-computer-friendly father-in-law would ask, "What causes that?"
I explained it the best I could -- "Running Windows 98 nearly ten years ago when everyone was on dial-up was considered "safe". Now that everyone's on broadband things have changed; security has changed. Imagine a bank with security practices from the 1950's that has no bars, silent alarms or security cameras... would you bank there?"