I have some questions
1) If a person brought a new laptop or computer and is planning to connect it to the internet. What should be the first thing he/she should do?
Well i always install the system offline, after that i connect a USB drive with CIS on it and install CIS.
Then i connect i to the network and run windows update's as long as needed to get all the updates installed. If you don't follow this procedure and you connected to an non-firewalled internet link you have a large risk of becoming infected because of worm traffic on the internet continuously scanning and looking for hosts to infect, if your not fully patched you run a high risk of getting infected.
2)How does a firewall work. It it one of the most important part of security? Why?
It basically allows you to control any traffic in and out your computer, say a virus has made in in your system and tries to tell it's boss where to find you it has to set up some sort of connection out to the internet, poof the firewall asks you will you allow virus.exe out to internet? you answer NO and you now your infected...
3)What is the difference between security software and hardware?
Complex, a hardware firewall would probably not have caught this virus from communicating because it doesn't know which process belongs to the traffic that's being filtered.
You can perfectly protect your network perimeter with it and provide "general" protection for more systems on a network, but with today's threats you need both... (think mobile, hotspot, hotel etc).
4)What should a person do when their computer is infected?
Depending on the infection, i would suggest to save the important data, use an other system to scan that data to make sure it's clean and start with a complete fresh installation. Viruses tend to change more parameters in your system then most AV's "restore" most of them are only good to remove the active components, but that doesn't fix your changed settings it has done on your registry for example.
5)Why is it important to update your security software?
I would strike "Security" software out of the question, it's important to update all your software.
For a virus/malware to infect you it most of the time aims at vulnerabilities that are present in the OS and other applications like Browsers and their plugin's etc... so if you are running a vulnerable version of FlashPlayer all they have to do to attack you is send you to a link with a FlashPlayer attack in it and your infected