Basically, check:
1) If the servers.def file is corrupt or 0KB (C:\Program Files\Alwil Software\Avast4\Setup\servers.def).
You can try and download the servers.def file,
http://files.avast.com/iavs4x/servers.def and replace the one in the avast setup folder.
2) If your subscription allows the update right now (i.e., if it is not expired).
3) Check your proxy settings into avast!:
Left click the avast icon > Settings
Update (Basic) > Details > Proxy
Make sure your browser is not set to "Work Offline" (this option is generally in the File menu).
If it doesn't help, try switching the proxy settings from "Auto-detect" to "No proxy" (I'm assuming you're not connecting to the Internet via proxy).