By default, VRBD is updated every 3 weeks; the interval can be changed by editting avast4.ini file, though.
avast! mostly relies on VRDB, yes - at least considering the "executable files" (the macroviruses are cleaned by other methods, not using VRDB). So, cleaning an infected file right after you installed avast! (i.e. without having the original file in VRDB) would not work.
avast 4.1 will include our Cleaner - that is able to clean the most common viruses using a virus-specific methods. The number of viruses healed by Cleaner will grow in time, as well as the integration of the Cleaner into avast! will get tighter.
Note, however, that any generic virus removal methods (that do not use a VRBD-like database) is usually not able to turn infected files exactly into their original state. For example, some information in the file header is often irreversibly overwritten when an exe-infection occurs. This information is unimportant in most of the cases; sometimes, however, it may cause problems - WinZip self-extracting archives will announce CRC errors, some copy-protected programs may not run, etc.
