For a good (if somewhat dated) read on sandboxing:
http://www.windowsecurity.com/articl...andboxing.html
If you want total security, lock the PC in a room only you can get to, and disconnect it entirely from the internet. Congrats - its secure. Otherwise, its all about using every tool to create a layered defense.
Sandboxing - like anything else - is another tool in the toolbox. Its not foolproof. Yes - sandboxes can be detected and bypassed - but doing so requires additional code that makes a virus more detectable. To detect a sandbox, the infection must query the system about its resources. This query is one of the things most "real time" protections look for.
Things like Java are sandboxes in and of themselves. Its a technology you use a lot. Sandboxing software that you can use to run your browsers within are free and easy. Give it a shot - layered defenses are good.