1. A disk scan mode, which you can run manually or schedule. All antivirus programs have this. This looks at every byte of every file on the disk.
2. A manual scanner, where you manually select a file or directory and scan it. Not used very often.
3. A real-time scan mode, which checks every file for viruses as it's saved and opened, blocking them before they can execute. Some cheap and free antivirus programs do not have this, and as a consequence are near worthless, because without a real-time scanner, viruses can operate for hours without detection. All the ones listed here have this.
4. A heuristic scanner, that detects 'virus-like behavior' from things that aren't in the virus definations, like opening up other executables and writing to them. Some of these work incredibly well, some of these don't do much of anything, some of them use too much CPU time, and some of them interfere with legitimate programs. Heuristic scanning has always been an idea that works better in theory than practice.

When viruses are detected, the software can usually fight the infection by removing the malicious code, usually without much loss of data. Sometimes it won't be able to remove the virus from various software cleanly, and you will be forced to reinstall some software, but that's certainly better than operating with an infection, which could cause random data lossage at any point in time.

All antivirus software requires a subscription to update antivirus definations. The standard update interval is daily, and subscriptions are usually sold yearly. Often it's just as cheap to upgrade as to renew your subscription. Antivirus software does not detect spyware unless specifically indicated, although sometimes the heuristic scanner will.

In addition to this, it's a good idea to refrain from downloading software from dodgy sources. Get it from the manufacturer or a large mirror site. If there's a current virus outbreak be very refrained in your web-surfing, don't go anywhere you don't trust completely until it's over.