What version of IE are you using, exactly?
It seems to be a problem related to the ScriptBlocker module. You can temporarily try to install avast without the ScriptBlocker selected - that should work for now...
Was the window that reported the problem the one that lets you send the report to MS? (the standard XP error window).
Also, please check the folder
\Documents and Settings\All Users\Application Data\Microsoft\Dr Watson
does it contain any files?
Thanks
Vlk