If you buy a new computer what is the preferred method of transferring your data to the new computer? Is it better to just start from stratch to avoid all the spyware and only bring over your games and document files, or is it a good idea to transfer everything? Do you set up your old drive as a slave drive?
hold down the letter “T” on the keyboard while booting to boot into Target Disk mode on the old machine, when you see the FireWire symbol bounce around the screen, the old machine is now essentially an external hard drive
take a standard 6 pin to 6 pin FireWire cable and connect it to the old machine
now you have a choice…
if this is the first time booting up your new machine, simply connect the FW cable to the new machine, and let the OS X setup utility walk you thru pulling the data off your old machine, grab your beverage of choice, sit back and let the machine churn away, once the data extraction is complete, it will tell you to disconnect the FW cable, and the new machine will reboot with all your data transferred over intact
if you prefer to do it the manual way, go thru the setup utility as normal, once your user account has been set up, plug in the FW cable, and drag over the files in your User folder on the old machine to the new User folder on the new machine
once you’re done with the drive manually, drag it into the trash to eject it, then unplug the FW cable
spyware/adware/viruses? what are these? 
yes, this is the procedure for the Mac, you didn’t specify if it was a Mac or a PC…
I usually just start completely over with a clean computer and only transfer the stuff that’s “irreplaceable,” documents and media and such. Also, I usually find that I need a lot fewer programs than I thought.
Then again, Joel Spolsky might be on to something when he said that programmers have the inefficient tendency to ignore how well something worked in the past, and try to build everything from scratch…
I keep all my important stuff on dvd so its just a matter of sticking the DVD in the new box and copying to the HD. mp3s and video are kept on a file server (also backed up to DVD but more of a hassle to get to) so I can just pull it accross the network. I use a thumb drive as well for the small stuff I like to keep handy.
Historically, what I’ve done…
•really old days: insert floppies into old computer, copy files to floppy. Insert floppy into new computer copy files off floppy. For files that were bigger than a floppy, use Compact Pro to create a disk-spanning compressed archive and then expand them on the new computer. Usually this included the operating system itself.
• middle era: insert a SyQuest, Zip, or Jaz cartridge into the appropriate removable-media drive. Copy files to cartridge. If necessary, use a second cartridge, if it won’t all fit on one. Shut down, switch cable to new computer, reverse the process. This would again nearly always include the operating system(s) it/themselves although I’d probably keep the pristine new one and bring over my extensions, control panels, preferences, and whatnot to make it behave like the old ones.
• modern era: remove the hard disk of the old computer and place it in an external FireWire carrier. Boot new computer, copy all files to appropriate locatiosn on the new computer’s drive. Probably use the old operating system unless the new computer won’t run on it.
I have a few chunks here and there of my current folder hierarchy that dates back to my System 7 days on my 7100. (I have individual files and programs that go back significantly farther, but not really in the same folder structure they originally occupied).
Typically, I’ll just set up my old hard drive as a secondary hard drive and copy stuff over to the new hard drive as needed. Viruses and adware have never really been problems for me, but if I had a nasty virus I’d be careful which files I copied.
If I’ve only got one hard drive, I’ll either burn backup CDs (like Turing Complete mentioned, you’d be really surprised how much crap you’ve got on your hard drive that you don’t use and won’t miss anyway) or if I have the ability I’ll copy my important files onto a friend’s computer through the network, reformat, and then copy everything back once I’m done.
But I did learn an important lesson the hard way; If it’s important, burn it onto a CD! You never know when your hard drive is going to randomly corrupt, and if you’ve only got one copy of something on that hard drive, it’s gone forever. 
(Luckily, I did back up the really important stuff, like my gigabyte-sized “source code” folder.)
Every time I’ve upgraded my PC in the past, the new hard drive has been twenty or more times the size of the old one; what I do is to install the old hard drive temporarily in the new system and copy the entire contents of the old drive to a folder called ‘Old System’ on the new one, so by the third time of doing this, I have an’ Old System’ folder that contains the old hard drive, including and ‘Old System’ folder that contains the previous hard drive, including an ‘Old System’ folder that contains the first.
Might be a bit wasteful of space and I know I’m bringing over loads of stuff I don’t need, but the trouble with Windows (less true nowadays) is that you could never be 100% sure that all of your applications were saving their data in the the same place - just copy ‘My Documents’ and you’ll find there was something in some folder under \Windows or \Program Files that you really didn’t want to lose.
Having transferred the data, I copy (not move) out the stuff I know I want to My Documents (or wherever) on the new machine, so the Old System folder remains a completely static snapshot of the moment of transfer.
In theory, I always intend to tidy up/delete bits of the old data that I haven’t accessed say, 12 months after the transfer, but in practice, I’ve never bothered to do so - the old data is a tiny drop in the ocean of the new hard drive.