What to allow through firewall?

My subscription to Norton Internet Security just ran out, and I'm sick of paying for their crappy program so I decided to go with free alternatives. I started with a fresh install of W7 X64 and settled on Avast! and Comodo firewall. I have no idea what I should do about incoming connections. This morning I was downloading the W7 SP1 beta, nothing else, and the firewall asked me if I wanted to accept an incoming connection from SYSTEM and it gave me an IP address. I accepted it, and when I look at the connection it says listening with nothing going out or in. Is this a bad thing? Should I just block all incoming connections? I"m very fluent when it comes to building and tweaking systems and Windows, but I'm clueless about firewalls. Thanks in advance for the help.
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More about what firewall
  1. Just got another from svchost.exe and I accepted it.
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