Basically a free and paid version is not about the effectiveness in killing off any virus. The difference is mainly on the features provided. For instance, paid version comes with features like parental filtering, safe browsing, firewall, backup, bootable disc upon OS crash, good support via phone, email, online chat and many more. You can view one of my post I made on my blog on how to tell if you need a paid antivirus. I had been using paid and free antivirus in two of my PC. The paid one is Kaspersky and it is rated top 3 among all the giants like Norton and BitDefender and so I don't have any question about the quality.

But for free version, I had chosen Avast antivirus simply because it is free and light. But the protection is not complete as it does not come with a firewall. You can choose to stick with Windows Firewall but I last heard, Windows Firewall in XP sucks back then. If you are using Windows 7, the firewall might be 10 times better. In order for me to get a full protection, I top up my security with Comodo Firewall where so far it is doing a very good job for me.

It is very subjective on whether you need a free or paid version. If you have kids at home, you might want to use parental filtering so that your kids won't go and browse some gambling, drugs or adult materials. So, free version cannot suite your needs. And lastly, Microsoft Security Essentials is also quite a good AV to use because it is free and light. But since I already tie up with Avast because it saves my life by deleting a Trojan by performing a pre-boot scan, I'm with Avast from there. This feature I don't think is provided in MSE or most of other paid antivirus, so Avast has the advantage over here.