Links
Spyware Warrior Rogue List - Use this to check whether anti-virus and anti-spyware programs are legit or not. There's a surprising number of scams out there.
HijackThis - shows a lot of information about things like Internet Explorer Browser Helper Objects (BHOs). Notably, shows everything, not just the things which are bad. Use with knowledge and caution!
Startup Apps Check - Is that oddly-named file starting with the system legit? Google for it, or try this site.
Removal
Spybot Search and Destroy - better than lavasoft's ad-aware, and includes a really handy registry change monitor, telling you when something fiddles about in the registry. Excellent for spotting spyware activities.
SUPERantispyware - This is excellent for detection and removal, and regularly finds things that Ad-aware and Spybot both missed. Note that nothing is perfect, and I usually use two or even three of these scanners on a bad system.
Trojan Remover This has caught several DNS changer type trojans (these redirect web lookups, usually search results to their own advert-filled garbage, plus block antivirus updates by redirecting the updater program to a dud host). The trial version is functional, and can be used to clean a system.
Prevention
AVG Free Edition Excellent anti-virus, free for non-commercial use and regularly updated too. Not quite a full-featured as paid for packages, but better than quite a few of them (macafee i've seen quite happily telling me nothing was wrong after a full scan on a system - AVG then removed 11,974 infected files from (around 40 different viruses!)
Zonealarm is an excellent software firewall. Not only does it give you good protected against other virus-infected systems trying to infect yours, it also alerts you to any new programs trying to use your network connection (excellent for spotting that "2vrub973bv.tmp" shouldn't be using your internet connection, for example!)
As of the time of writing, all of these tools had free versions. (or functional trials, in the case of Trojan Remover)