Let's hope you don't fall for that trap. And I'm a little unsure why you think this will hide your activities. I can only guess you haven't read much about honey pots, the FBI Going Dark program and such?
Bob
I want to set up a VPN on my laptop and home network in order to beef up my security and privacy. But I have a few questions
Does a VPN really allow you to anonymously use the Internet, download, stream, ect? Will a VPN cripple my connection speed? Who/what will be able to see my computer, history, and traffic (hackers, ISP, network intruders)? Will this work when I'm not on my home network (if I'm on a public network, friend's network, using a mobile hotspot)? Do I set this up on my computer or my router?
I'm not looking to do anything nefarious or legal I'm just realizing how lax my security is, also I'm tired of getting my computer hacked. Twice someone has accessed to my built-in WebCam, luckily I caught the intrusions early and took care of the problem but I want to make sure this doesn't happen again. I'm also generally concerned about being tracked online, I'm not worried that the government is watching me I'm worried everyone else is (ISP, websites, databases). I do have an antivirus and anti-malware program on my computer I keep them updated and run scans regularly but I'm now realizing that this is not enough and I know I'm little late to the game.
Current computer security
Microsoft security essentials
Malwarebytes
Windows provided firewall
Firewall built into my router
Computer
Dell laptop (4 years old)
Windows 7 ultimate 32 bit
If a VPN and what I already do is not enough what else should I be doing?

Chowhound
Comic Vine
GameFAQs
GameSpot
Giant Bomb
TechRepublic