Well when you install avas5 it doesn't install in the avast4 folder, so I don't understand the message, yes it installs in the Alwil Software folder and technically it would overwrite/remove existing files/folders, but it doesn't install anything in the avast4 folder.
So allowing it to proceed I feel would have been the best option as part of that as that would have preserved the license information and converted it to work with avast 5.
Having done a clean install you destroyed that license information, the original license won't work with the new avast 5.0.
Now since I use the free version( it converted the registration with no problem) I don't know how the Pro license file works. There is meant to be an avast page where you can convert the 4.9 license key to a license file, which is emailed to you.
OK after some rummaging, her it is - avast! 5 Pro license convert from 4.8 Pro license. Try
http://www.avast.com/resend-license.php now, it should ask for your email and send it to you (presumably it will check you have a legit 4.8 Pro license first).
Edit: whilst off on my rummage, Scott posted the link
