It is an interesting question,
Yes, according to Awil it does detect spyware and malware, but they don't really provide any details as to what extent. Whilst agreeing with DavidR and ardvark that it is advisable to have additional dedicated antispyware/antimalware software, and I do use some of the software they mention, it would be nice to have some understanding of the type of protection that Avast! is providing and the extent of that protection. For instance Avast! doesn't use "immunisation" or registry "zone blocking entries", it doesn't appear to provide any browser home page hijack protection, or host file locking.
Aside from rootkit detection, is it's malware/spyware protection only during a scan (on demand), or is it realtime?. If it is realtime, then is this function via the standard shield or the web shield, or both?
Perhaps this information is available, in which case I would appreciate a pointer to it. In the meantime, I rely on Avast! as great antivirus software, and any other protection it might offer as a bonus, but I don't rely on it as front line antivirusd/malware protection.