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What apps do I actually need to keep my phone safe?

I use Lookout because it's free and doesn't affect performance much. Some forum members antivirus apps are useless as android's OS is Linux based. If your phone is insured by Asurion, they have a free app called Mobile Recovery that will locate your phone, remotely sound an alarm on your phone, lock your phone, and wipe your phone contacts. Works pretty good as I just tried it out recently. There is also another app called Where's My Droid that works similiarly. I've seen apps on the Market that will also secure your photo gallery and data with a PIN.
 
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As far as protecting your personal info on the phone, the best and easiest way is to not put it on the phone. Don't use the phone web browser to log into sensitive areas like banking or anywhere you have a credit card number for purchases (PayPal).

Smart phones are a handy tool but be smart about how you use it.

Until a long term company like McAffe or Norton gets involved with virus protection for Android OS, I would not trust any other app to "Protect" my phone from virus, Trojans, or data miners. Ways to hack into programs come out as fast as new apps do.
 
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You can put a PIN or some other locking mechanism on your phone natively. If you run 2.2, there's an app called Autowipe that will toast your phone and your SD card (if you choose) if someone enters the wrong access code X number of times. I've tested it and it leaves my phone a completely useless brick. It's very effective.
 
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It's all about what apps you install, and don't download apps from alternative sites (especially pirated ones) as people can inject stealth spyware into them. If you find a copy of Swype, Smart Keyboard or SetCPU and such without buying them, you're taking a risk. Antivirus in general isn't needed, but Lookout is nice for the alternative backup and location while it scans apps that get installed (not sure if they actually scan the content and integrity of apk packages).
 
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