I had the same problem on my friend's laptop I was fixing.
Just because there's no Group Policy editor in Vista Home edition, doesn't mean that viruses and the like can't tamper with the Group Policy settings in the registry and disable Avast Gui from starting.
After much internet searching I found this link, with a good fix that worked for me:
http://social.technet.microsoft.com/Forums/windows/en-US/5831722b-3f5e-4834-985a-6f9c014c9bd4/programs-blocked-by-group-policy-but-why?forum=w7itprosecurityYou basically have to back up the policy entries in the registry, using regedit.
As the responder says:
"The malware may have put in a registry entry under policies that is
causing your behaviour.
As a last resort you could try this:
Logon as an Administrator
[In Registry Editor]
Navigate to HKLM\Software\Policies and nose around to see if anything
there might be the cause.
Next, Navigate to
HKLM\Software\Microsoft\Windows\CurrentVersion\Policies and do the
same.
If nothing jumps out at you, back up both of these registry keys then delete them and then
run GPUPDATE /FORCE and see if problem is still there.
If so, try all the above steps again, but this time use HKCU instead
of HKLM."
I renamed my 4 Policy registry key entries as PolicyBAK, then ran GPUPDATE /FORCE from an administrator command prompt.
I noticed that some new policy keys came back, (but not all of them, presumably without the entry that was blocking Avast)
BTW, don't forget to reboot your machine after doing the GPUPDATE from the command prompt.
After that, Avast worked fine for me, I got the Icon back in the system tray, and the User Interface works again.