1. I can only assume that it would only scan the E drive when you have selected all drives or when you just select that.
2. I really am in the dark on a) what you mean by a normal scan and b) exactly what you mean by nothing was scanned.
avast lists files that can't be scanned and it also gives a reason why they can't be scanned, but it doesn't say 'nothing' was scanned. The list only includes what couldn't be scanned there will obviously be those that have been scanned which wont be listed.
3. By booting into safe mode, since there is no selection of dual-boot, I would assume that it boots into the default, which I would presume is Vista. This as far as I'm aware has nothing to do with the fact that avast is installed, but an OS issue and Dual boot.
Safe mode is just windows running at a low screen resolution (no video graphics drivers loaded) and in a condition with many applications and functions disabled so that there is a high likelihood that it will boot 'safely.' So other than that it operates normally e.g. with partitions, folders, files, etc. So I believe you have a misconception of what safe mode is.
4. Sorry you have lost me, the on-demand scan doesn't run in the background and certainly not in yahoo messenger
5 each avast installation is linked to the windows registry in the particular drive of the OS it is installed in.
You can only run one OS at a time, so there would only be one occurrence of avast running on-access scan. That is why if there is a problem it only relates to the OS installation you are running.
When XP is running, is there an avast 'a' icon in the system tray ?
What avast processes are running in Task Manager, they begin with ash or asw, see image ?