Do I need anti-virus protection for my Mac?

Personally speaking I have never run any form of anti-virus protection on my Mac for home use. But then I never run 'dubious' software (such as bit torrent clients or cracked software) on my machine.Also I consider myself to wise to the ways of 'phishing'. If you keep your software up to date and back up your important data I see no reason for an average sensible home user to run anti-virus protection. Often you will find that these virus protection programs can be 'system hogs' and they will capitalise on a lot of your systems valuable CPU. However, if you are a business user or your Mac may be an attractive target for hacking or phishing then I would recommend that you err on the side of caution.

Any free anti-virus tools I can use?

The most popular free tool appears to be ClamXav. If you are running a large network for business I would recommend something more comprehensive from either Mcafee or Norton.