Why pay when you can get something for free? Like I've mentioned the Dh in is IT, and he uses all these (and then some). Besides the fact that a Sys. Admin. would think the free ones are just as good as the pay ones, its FREE. We really like free. That's better than cheap and on sale any day of the week.
Linux - An entire operating system, for free. Even if you don't need it today, store it away on a back shelf in your memory, some day you might need it.
Open Office -You got your writer, spreadsheet, draw, whatever you need. And if you really want to pay for something you can pay for support. But even that's not necessary.
AVG anti virus - Please don't spend money on anti virus software. This works well and keeps us viri free. 4 computers and counting and not one has been infected.
Spybot Search and Destroy - You need more than just anti virus software. You need spyware software. If you computer is running slow you might have spyware on your computer. ETA: I have been informed that new versions may come with Registry Booster which can cause problems with your computer. It can be removed but you might want to play it safe and get the older version.
Free CD to MP3 convertor - Don't pay for downloads, turn your cds into MP3s. This is really helpful for those older cds you have that you can't get downloads for.
Roxio dvd/cd creator - I use Roxio but there are other free DVD creators out there. Unless you are a professional, this is all you are gonna need. I have made some super cute dvds using this.
Christmas Eve Crisis - Oh you know I had to list a game. This one is so cute, graphics are great and its available for Linux as well.
Now you are probably wondering where you can find freeware, thats not malicious of course. There's lots of that around! I usually trust Tucows and Kim Komandos site. There is also the Best Freeware Blog which is updated constantly. Now, go enjoy, your new toys. Consider it a Christmas gift from me to you.