The answer to the question, "How much anti-malware is too much," depends upon several factors, not least among them how the individual is connected to the internet and interacts with it. A "layered" approach to security certainly offers the greatest protection, but the cost could be system slowdowns and instabilities. That you have a dial-up connection makes you inherently more secure than with a broadband connection (though most would gladly make the trade for a faster connection...).
I would concur with micaman with respect to Ad-Aware 2007. A Beta tester for the product, I feel that Lavasoft jumped the gun with its release; even with three updates after coming out of Beta, it is still not ready for prime time, alas. (Besides, it will still not be nearly as comprehensive as other applications.)
As mentioned by others, one ought to have only ONE active firewall and antivirus suite. Having additional on-demand anti-virus (or other malware) scanners for second (or third opinions) is fine - but during a scan with one of them, all other anti-malware engines should be temporarily suspended as, with the evolving nature of the nasties, these programs will often fight with each other. Additionally, as many will scan each others' files, if the option to exclude various files or processes is available for an application, I recommend delisting each of the anti-malware programs from one another's scans (this will also decrease scan times dramatically).
I have used, like and generally recommend, Webroot's SpySweeper (and Beta-tested its current version, 5.5), but have no familiarity with CounterSpy 2.5 (its predecessor, v. 2.0, had some serious issues which likely have been corrected in the current version). It may well be a worthy choice. As stated above, malware has evolved, and the distinction as to whether a particular agent is viral, spyware, trojan, etc, is often one without a difference. The trend now is to combine the various anti-malware functions into one unified engine. This provides, in general, faster scanning, more efficient use of system resources, as well as greater system stability. (Symantec has taken this route with their Norton Internet Security 2007 and Norton 360, both highly-rated products; NIS 2008 is now in Beta.)
As for a choice of stand-alone firewalls, my own top recommendation goes to Comodo Firewall Pro (http://www.personalfirewall.comodo.com/), PC Magazine's Editor's Choice (http://www.pcmag.com/article2/0,1895,1969207,00.asp) and a top pick of Ian "Gizmo" Richards' Tech Support Alert (http://techsupportalert.com/ - an excellent resource site) and many others. Indeed, recent critical testing put Comodo Firewall Pro at the head of the list - whether boughten or free (http://www.matousec.com/projects/windows-personal-firewall-analysis/leak-tests-results.php).
In addition to the "usual suspects" of malware, one need also be aware of the insidious rootkit, which can be very difficult to detect, as well as remove. The top-rated utility to do both is Panda Anti-Rootkit (http://www.pandasoftware.com/products/antirootkit/?track=39067), PC Magazine's Editor's Choice (http://www.pcmag.com/article2/0,1895,2119252,00.asp). It is regularly updated.
Though Spyware Blaster offers useful protection, I recommend IoBit's AdvancedWindowsCare Personal (http://iobit.com/), which has a much larger library and more frequent updates. It also performs useful tweaks and optimizations (which, for those who like to do their own tweaking, can be overridden). Just remember to update after installing, and perhaps once or twice a week, as the free version does not update automatically. IoBit's SmartDefrag is also a worthy [and free] defragmenter that does a better - and faster - job than the version of Diskeeper built into XP.
[Another useful free app is CrapCleaner (http://ccleaner.com/), which will compliment nicely AWC to keep things clean and running smoothly. (CCleaner can be configured to retain those cookies you may wish to keep, while AWC cannot. It also has a handy Uninstall tool and one for programs that start with Windows, essentially a shortcut to msconfig.) It is regularly updated by the authors.]
Finally, if you know someone with broadband, perhaps they could download whichever apps you're interested in and burn them to a CD for you, since downloading with dial-up would be almost prohibitive. (By the way, the same trick can be done for Windows Updates from the Burning Bush of Redmond - http://www.pcmag.com/article2/0,1759,2017577,00.asp.) Good luck!