do i have viruses on my computer that my virus scanner doesnt pick up?
You keep AVG updated right?

If you dont feel safe with AVG - you can do a free online scan with trend micro-
http://housecall.trendmicro.com/

i installed the firewall like memory said but now things are poping up and i dont know what to click for some of it.
If its working properly, whenever something tries to access the internet, the firewall will ask you to allow it to go or not allow. This works to defend against trojans/dialers/spyware. Can you tell us which firewall you picked?

And physical security- if you really dont feel safe, just do something to make him feel like you lied about where you live on before, and you actually live somewhere else.