Internet Explorer 7 Won't Access Any Web Sites Since Avast 5.0.396 Download

[SolutionsAbound]

I downloaded Avast! 5.0.396 yesterday and since then, Internet Explorer 7 opens but won't access any Web sites. I have dial-up Internet service and I am connected to the Internet when this happens. I previously had Avast! 4.8.1368. I downloaded version 5.0.396 from the Avast! Web site but was directed to CNET.com for the actual download. No matter what site I try, the screen says "Internet Explorer Cannot Display This Web Page." I experimented with the various protection shields in the program, and found that when I turn off the Web Shield, IE 7 works perfectly and I can access any site I want. I have Windows XPSP3. In the Web Shield area, "enable Web scanning and use intelligent stream scanning" are both checked. Why do you think this is happening and how can I correct this? Thanks for your replies.

[DavidR]

What is your firewall ?
Does it allow AvastSvc.exe internet access (see image, there are three services entries all for AvastSvc.exe) ?
- If it does delete the entry for it and do a manual update and reconnect to the internet, this should force the firewall to ask permission again.