Note that if I switch to "passive mode," then the crash goes away, but then of course I don't have any realtime protection.
If passive mode is NOT selected, I'll even crash the host if in a VMware guest if I try to run Virtual PC there, unless I uncheck the virtual option in "troubleshooting." However, even with it unchecked, the VM inside Virtual PC still crashes sporadically and the apps in it experience unexpected crashes.
I suspect this is aswVmm.sys which is incompatible with the vmm.sys used by Virtual PC. I know you can't install VPC in Windows 8, because that same file is incompatible, so I'm guessing Avast simply dropped Windows 7 support with respect to usage in that DLL. Not cool.
Avast 17.9 didn't cause these problems, at least with Virtual PC inside a VMware virtual machine, which is how you can run it on Windows 8 (in a Windows 7 VMware guest).