Windows 7: Is Windows Defender necessary???

No, Windows Defender doesn't do anything! I was testing it with malware and it didnt picked up any malware. I suggest you to get either Malwarebytes or spybot search and destroy.

Since the OP had Kaspersky Internet Security 2011 at the time of his/her posting, then absolutely, WD was not needed because KIS was in control of protection & detection of all malware, including spyware. Some 3rd party security suites will either turn WD off, or disable it in services, and that in my opinion, is the best option. MBAM or Spybot in real time is not needed if the user is using a decent AV from the likes of MSE, avast!, Norton, Kaspersky, Comodo, ect..., since all of them include spyware protection. I use MBAM myself, but only as an on-demand scanner. MBAM in real time is not a bad idea, but it isn't *needed*.