I've used Microsoft Security Essentials as a decent antivirus for a while. Having cleaned computers for a few years already, I can tell you that none of the antiviruses out there are 100%. Some are better than others, most are merely adequate.
When clients ask me which antivirus I recommend, they are really asking, "which is the cheapest antivirus that does a fair job." Some of the popular free antivirus apps out there have performed dismally. I clean those out routinely.
I was impressed when Microsoft came out with OneCare, which has morphed into Security Essentials. Best of all, it's free. What I really like about MSSE is that it doesn't bog down your computer like the others. You can actually get some work done during a virus scan.
As far as the ability to catch threats, MSSE has done a good job. Lately, however, I've been cleaning computers in which MSSE doesn't even see the malware. Fortunately, I clean computers using a variety of tools for good measure. I'm disappointed that MSSE isn't doing as well as it used to.
I've been looking at other options, premium options, to recommend to clients.