Having been a computer user for 25 years, my first was a VIC 20 in 1981, I've used a lot of programs.  Here's the seven FREE programs that I recommend people have.

1. Firefox Web Browser:  An award-winning, web browser that allows you to browse the Web with confidence.  Firefox protects you from viruses, spyware and pop-ups.  It delivers Web pages faster than ever, and it’s easy to install and import your favorites. Packed with useful features like tabbed browsing, Live Bookmarks, and an integrated Search bar, Firefox will change the way you experience the Web, for the better.
2. Thunderbird E-mail:  Simple to use, powerful, and customizable, Thunderbird is a full-featured email application. Thunderbird supports IMAP and POP mail protocols, as well as HTML mail formatting. Easily import your existing email accounts and messages. Built-in RSS capabilities, powerful quick search, spell check as you type, global inbox, deleting attachments and advanced message filtering round out Thunderbird's modern feature set.
3. AVG Anti-Virus:   AVG Free is easy to use, has regular and automatic virus databases updates, real time protection of files and e-mails, and both scheduled and manual testing.  I've been using AVG for over 8 years and it has prevented over 500 viruses from infecting my computer,
4. OpenOffice.org:   OpenOffice.org is a powerful, fully-featured office suite that is compatible with Microsoft Office®.  That means that you can open, edit and save files created with Word, Excel or PowerPoint using OpenOffice.org.  But OpenOffice.org offers more features: a drawing tool, a Math editor and PDF and Flash export to name just a few.   
5. Spybot - Search & Destroy:   Detects and removes adware files and modules from your computer. Spybot also can clean program and Web-usage tracks from your system, which is especially useful if you share your computer. Modules chosen for removal can be sent directly to the included file shredder, ensuring complete elimination from your system. For advanced users, it allows you to fix Registry inconsistencies related to adware and to malicious program installations. The handy online-update feature ensures that Spybot always has the most current and complete listings of adware, dialers, and other uninvited system residents.
6. Ad-Aware SE Personal Edition:   With the ability to scan your RAM, Registry, hard drives, and external storage devices for known data-mining, advertising, and tracking components, Ad-Aware SE easily can clean your system, allowing you to maintain a higher degree of privacy while you surf the Web.  
7. Picasa:   Picasa automatically locates all the pictures on your computer and sorts them into visual albums organized by date with folder names you will recognize. You can drag and drop to arrange your albums and make labels to create new groups. Picasa also makes advanced editing simple by putting one-click fixes and powerful effects at your fingertips.