Hey, I registered just to provide a possible solution -
And bingo!I was right. It turned out to be Eraser v. 5.87(http://eraser.heidi.ie/).
I had earlier been using the v.5.86 without any problems, however on a new install I decided to go for the latest version.
I hope that helps out someone.
Mate, thank you very much for providing this information! I can confirm your observation!
I encountered the same problem and uninstalling Eraser 5.87 solved it. I'm now using an older version of Eraser and everything runs fine again.
The problem discussed here however doesn't seem to be specific to the combination of Avast/Eraser, since there are other users affected who don't have Eraser installed. My guess is, that it has something to do with the use of shell extension. If you are affected, you should probably check if there is an application that uses shell extensions and deactivate or uninstall it prior to an attempt of installing Windows from scratch or dumping Avast.
I also found that the announcement for Eraser 5.8.7 at
http://eraser.heidi.ie/announcements/20090611.html says:
Important note: since Eraser 5 is now compiled using Visual Studio 2008, the compiled binaries...
This may indicate that there is a problem at the development level (libraries or whatever) and thus could affect a lot of applications.
Regards,
Ralf