Anti-Virus - Microsoft Security Essentials
Virtual PC/Virtualbox
- Applications that require direct access that you need to test out first
- Untrusted applications
Sandboxie
- Applications that don't require direct system access
- Applications that don't require access to everything i.e. TeraCopy
If you install the application completely in the sandbox use FileTypesMan to fix application defaults and group applications that require access to each other i.e. K-lite codec pack/Virtualdub
Edit:
I personally install almost everything into a virtual machine or sandbox. Not just to avoid a flaw in the application from being exploited into infecting the system but to keep the system clean so when I decide to upgrade or stop using that application i can completely remove it.