Firstly install Win XP with the latest Service pack. Run Windows update (START, ALL PROGRAMS, WINDOWS UPDATE) and update Windows and all your device drivers. Go download all the latest versions of applications you use like FTP server or proxy or so, old versions of programs is insecure and you could be hacked that way..
Disable the “guest” account on your PC and rename your “administrator” account. Right click My Computer and choose Manage.
Stop any services you don’t use, but be careful not to stop something that u use ( RIGHT CLICK MY COMPUTER, CHOOSE MANAGE, SERVICES AND APPLICATIONS, SERVICES). Stop the MESSENGER and REMOTE REGISTERY services.
Delete the admin shares, share it as something else and then stop sharing it. Then when u reboot it will not share it automatically again. With these admin shares domain admin’s and hackers can access your PC. Make sure to put a complex password on all your accounts.
Make your hard drive NTFS, or just put a password on your BIOS and make sure you change the boot order to boot first with the hard drive, so someone cannot boot up with a CD, delete your SAM file, or crack its password and gain administrator access to your PC..
Make sure the built in firewall is enabled. Check in control panel for Windows firewall. This firewall may be the cause that some of your hacking applications and tools will stop working, so if you have a problem with an application make sure to add this program to your windows firewall exceptions.
Install some kind of anti virus program, Norton Anti Virus works good, but remember that alot of hacking tools are picked up by Anti Virus, so disable your Anti Virus before running those tools.
Also install a Spyware removal tools like Spyware Doctor
source : Hackers Guide for better Protection