The file asked if it allowed instup.exe (location C:\Program Files\AVAST Software\Avast\Setup), which handles the avast update/install process.
If it does allow it, delete the entry for it in online armor and it should ask to connect allow it.
If that doesn't work then try an avast repair:
- repair of avast:
XP - Add Remove programs, select 'avast! Anti-Virus,' click the Change/Remove button and select Repair, click next and follow.
Vista, win7 or later - Control Panel, Programs & Features, uninstall a program, select 'avast! Anti-Virus,' click the Uninstall/Change and select Repair, click next and follow.
You may need to reboot after the repair.