I don't know why it is reporting that you have the latest version - Try a 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 - 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. Then try the manual program update.
If that doesn't work, then it is probably best to do a clean install of the latest version:
- Download the latest version of avast, 7.0.1456 http://files.avast.com/iavs5x/avast_free_antivirus_setup.exe
and save it to your HDD, somewhere you can find it again (if you didn't save your last download). Use that when you reinstall.
- Download the avast! Uninstall Utility, aswClear.exe find it here
and save it to your HDD (it has uninstall tools for 5.x, 6.0.x and 7.0.x).
- 1. Now uninstall avast! (using add remove programs, if you can't do that start from the next step), reboot.
- 2. run the avast! Uninstall Utility from safe mode, first for 6.x if previously installed and then for 7.0, once complete reboot into normal mode.
- 3. install the latest version, reboot.
That said there is likely to be a new version out in the near future as we are in a beta testing phase with an RC version in testing. So hopefully that will be released as a normal program update in due course, you may want to put off your update/clean install for a little while.