Windows ME and earlier had problems with multitasking (running more than one program at a time[*]) and so most spyware programs are designed for Windows 2000 and later. That's why you never had any trouble.
Unfortunately, getting a modern PC kills you. I have about six friends with modern PCs and every one of them has some kind of virus/spyware problem. In my experience, it's difficult to impossible to bring a computer with a severe infection back to life.
Most Freepers are relatively computer savvy from what I see "on the ground" with average people. Average people don't know how to use anti-virus/spyware software and turn their computers off at night so it doesn't run automatically. This creates constant virus problems in my experience even when malware softwre is installed and (theoretically) operational.
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[*] In this context, that means actively running - so if your web browser is loading a page and you click on an email, you're running two programs at once even if you have a bunch of others waiting for input. Windows ME handles the latter situation just fine, the former not so great. The virus/spyware program has to run in the background and so it tends not to be compatible with ME and earlier.
Let me ask you this, though -- is it true that the bad guys can "scan" the net for unprotected computers, or is that just a myth? And isn't it true that they can't actively put stuff on your computer but instead have to sort of passively wait for you take the initiative, like by clicking on an infected email attachment or downloading and MP3 or something? I'm under the impression that as long as you don't go to chintzy websites and try to download stuff, you're safe. Is this true? Or can they reach out and touch you, so to speak.