Unlike you, Kabster, I don't have a problem with the system freezing.
I just can't make the program run.
Considering there are millions of programs, it's always probable that there will be
some that don't behave well together until the conflict's have been worked out.
I'm sure that'll also happen for this conflict.
I don't use WinDVD so for me, this isn't urgent.
I'm sure that those that do use the program, this is extremely important. 
Well... system freez is bit exagurated since i can get it right again just by loggin off and on ...
But i cant use windvd too..
So, u say nothing freezes ... so u can shut down windvd application window on your desktop ..?? Or doesn't windvd even appear before u when u start it up ... which of the two is it ?
In my case windvd starts alright but then it freeez... but wait now that i come to think of it ...
Windvd always disables my windows earo feature .... after it starts... and at that point the application crashes while avast is running in the background..!!!
Its plausible that this problem is an combination of the both windvd and windows earo !!!?? hmmm.... but then again ... my windows earo is alway enabled by default and that doesnt seemed to upset avast ...
Maybe going from earo to basic does !!!
oh well....
no use to break my head about it ... its clear avast has some bugs to deal with !!
cheers,