The suggestion by k.u.r.t, does not work for Outlook 2003/2007, even if the registry key exists Outlook still fails!
There is an other way to solve the problem without copying the dll to the Avast4 directory, and 'coolsilver' gets the credit. If you have no other Outlook plugins and only use the Avast Outlook plug-in then delete/rename the file 'Extend.dat' in directory:
C:\Documents and Settings\<user id>\Local Settings\Application Data\Microsoft\Outlook
(Put the correct username in the <user id> place!)
A third option is to use a hex editor and modify the 'Extend.dat' file changing .......\Alwil Software\Avast4\ashOutXt.dll to .......\Alwil Software\Avast5\ashOutXt.dll.
What would be really cool is for Avast to supply a utility to correct the 'Extend.dat' file. See the problem is indeed more complicated! If a PC is used by more the one user, only the user who installs Avast will get the Outlook plug-in updated to the new version. Other users, that also use Outlook on the same PC are not updated and they will get the:
"The add in C:\Program Files\Alwill Software|Avast4\ashOutxt.dll could not be installed or loaded."