Solution:
You need to rename/remove the CTF temp files in C:\Documents and Settings\All Users\Application Data\Avg8\update\download…. Dont delete all the .bin files in there unless you want to re-run all updates since your original installation (reinstallation seems to cause a problem in IEs Link Scanner which causes IE to Crash). Only rename/remove the avginfo files that end with .ctf.
There were two .CTF files (avginfoavi.ctf and avginfowin.ctf) in that folder, and deleting them fixed the problem indeed.
Source: AVG Forum
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