Yes Android is most vulnerable mobile platform, people faces lot of problems because of viruses.
Personally I have never used any antivirus for my Wildfire and never had any issue. I do not prefer to install app from places other than play store.
Over my grand I am using AVG, it scans all the apps at the time of installation. If you do download apps from third party stores then I will suggest you to have an antivirus app.
I just want to clarify -as an Android developer- I can assure you an Android phone cannot get a virus by definition. Each application runs in its own process. Without getting too technical think of each application as being its own user account. Very brilliant idea in design. Many of you are correct however about being a potential virus carrier and infect a pc. Also apps can be malware, which isnt a virus but can be dangerous like many have stated they might be able to read your contact information and text messeges and send that data to someplace. Rest assured if you don't root your phone and let any old app have superuser permissions your sensitive data such as passwords are safe. Just be carefull to read permissions, and avoid shady looking apps. Android is just as secure as other platforms but with an open market you are responsible for your safety. That's not a bad thing.
A final note: In my opinion security apps like lookout are a scam. But if you must use one AVG is very reputable on desktops and the app has some usefulness