In the past, I have used Avast and SpywareTerminator Real Time with HIPS as my security system and it has worked well with W2K.
I am wondering if the SpywareTerminator Real Time with HIPS is still necessary since Avast now has antispyware and antirootkit added. I would love to only have one app running so my computer is more responsive, but I don't want to compromise security.
My suggestion, continue as normal with ST installed including HIPS, try it and see what the results. Lots of people are using ST and the new version and avast 4.8 which doesn't have HIPS so there really shouldn't be any HIP to HIP clash.
See if there is any difference with how the system used to run with ST and 4.7 and 'report' any issues if there are any. That is how it should be done as we would never know if there was a problem, so no one would be aware and working on a resolution.
I also recommend that you don't have all your eggs in one basket and use a multi application/level approach to your security (without going paranoid

), stich with your existing set-up if you were happy pre 4.8 leave it and see.