Not true at all. I can do everything I need to do on the net without overly risking infection. This is not the same as saying that I can do everything I want to do. I can check email, Google, hit my work sites, etc and be fine. Of course, one of those sites could be infected--but the risk is about as low as it gets. But without protection, just surfing around is foolhardy, I agree.
Of course, this also presupposes that the OS is completely patched up. And it's not perfect. But simply having antivirus installed often gives people a false sense of security. Knowing how to surf smart is a more important tool.
That said, I usually have firewalls, antivirus, and regular malware checkers running regularly anyway. And I always recommend them for anyone who couldn't write their own polymorph worm.
And yes, all intrusions can be repaired. Wipe the drive and reinstall. And when I say "wipe", I mean the MBR too. That may seem drastic, but that's what backups are for.
Torben
EDIT: By the way, I totally agree that in general, surfing without protection is the internet equivalent of unsafe sex for your computer. You can minimize the risk but not eliminate it. However, you can use all the protection in the world and you are still not 100% safe. And warez sites are indeed especially bad for infection risk.