Time machine will backup Windows if installed under Parallels or VMware Fusion, but will not backup a Bootcamp partition as this will not be Mac formatted. If your drive goes down Time Machine will restore your Parallels and Windows along with everything else, but if you try to look in your Time Machine Windows backup for individual files, you can't as it is just one huge file.
This can cause Time Machine problems, if you add one 5 MB jpeg to Windows, instead of just appending this to the backup, it will backup the complete Parallels Windows file which can get very big. Because of this Parallels offers the option to exclude itself from the Time Machine backup. If you take this option you'd need to backup regularly from within Windows.
Similar problems occur with Entourage, if you have a huge database file as some do, I regularly see 15 GB or more, you receive 1 new email and Time Machine makes another copy of the identities database.
Another backup option is to use Silverkeeper to simply backup your user folder. Then each time you backup and a file has been added to Parallels Windows, it simply replaces the large file rather than recreating multiple copies as with Time Machine. I prefer this and additionally make weekly clones with Carbon Copy Cloner. I haven't checked to see if Silverkeeper is Snow Leopard compatible yet.
I too would recommend AVG Free anti virus for Windows.