Additional information, not necessarily relevant to the most recent posts here but possibly useful as regards the general subject.
I gave up trying to get a W7/XP dual boot to work without XP deleting W7 restore points: believe me I've tried almost every method I found suggested for hiding the drives from each other including two registry edits.
Restore points, Windows' built in safety net, I hate anything that messes with them. As a result I decided instead to settle on using Windows 7 Pro's XP Mode which requires the use a VM. The standard recommendation is to use MS Windows Virtual PC. No XP driver troubles and no restore point problems I hoped and that proved to be the case. Everything else went well too until after I'd installed AVAST on the 'guest' XP system.
The virtualization option was unticked in Troubleshooting just as done for the host W7 system but after reboot I noticed all sorts of trouble I hadn't had before. I couldn't cut and paste without crashing the VM and the same happened every time I even tried to access a shared drive or volume. Unacceptable.
Internet research on a number of PC help forums/web sites and from a number of different users laid the blame for exactly the same issues I was having on using AVAST.
Whether it was the cause or not I could not be bothered with the hassle of an AVAST uninstall and re-install so I scrapped the whole Windows Virtual PC installation and started from scratch using VMWare Player instead of Windows Virtual PC just to remove that variable too. But this time I eschewed AVAST for the guest XP mode system and went for another lighter weight AV alongside my usual anti-malware programs.
All has being going well since - no problems.
Conclusion: in these specific circumstance ie. when using a VM the evidence suggests it would be prudent advice not to use AVAST as the AV program on the guest system.