Do nothing or rather No Action means take none of the actions listed in the alert, but it won't allow you to run what it considers an infected file, so it isn't deleting it at all but stopping it from running.
The location of the standard svchost.exe file is c:\windows\system32 so that is the file which should be running and not this one. So to me that one is highly suspect. Also see this, which expresses concern,
http://vil.nai.com/vil/content/v_134757.htm, there are other similar hits on google also.
If this is a legit program why isn't it using the standard svchost.exe file and or why isn't it in its own program folder.
New signatures are added and tweaked all the time to pick up more malware, si it isn't unusual for this to happen.
You could also check the offending/suspect file at:
VirusTotal - Multi engine on-line virus scanner and
report the findings here the URL in the Address bar of the VT results page. You can't do this with the file securely in the chest, you need to extract it to a temporary (not original) location first, see below.
Create a folder called Suspect in the C:\ drive, e.g. C:\Suspect. Now exclude that folder in the
Standard Shield, Customize, Advanced, Add, type (or copy and paste) C:\Suspect\* That will stop the standard shield scanning any file you put in that folder. You should now be able to export any file in the chest to this folder and upload it to VirusTotal without avast alerting.
If it is indeed a false positive (no other scanners consider it spyware./malware), see
http://forum.avast.com/index.php?topic=34950.msg293451#msg293451, how to report it to avast! and what to do to exclude them until the problem is corrected.
