With a router you are protected against incoming attacks essentially the same way you are by a software firewall. But there is no reason to not keep the XP firewall running also.
You have a Dell, right? You probably have a CD labeled Drivers or Resource and Drivers with all the drivers you need (except for external things like a printer). After you are all up and running again you may want to check for any Dell driver updates, but the CD is fine for getting started; also often fine "forever."
The only thing I can say with full confidence about anti-virus (or anti-spyware) programs is that there is no best one unless you define your criteria and time very carefully. I have a (paper) subscription to
PCWorld magazine (see the link for some of their reviews) and skim their annual ratings of the "best" anti-malware programs. None ever get close to perfect, and every year the rankings change.
I was satisfied with Ad-Aware and Norton Anti-Virus (one system) and AVG free (all other systems), but recently have switched to using
Microsoft Security Essentials, as it seems to be quieter and less obtrusive. When I ran a full scan (instead of a quick scan) on my desktop it took hours, but did not appreciably slow the system; and it found and removed something that Norton, Ad-Aware and Spybot had not detected.