No,Scan all files means that avast! will scan all files that you will access(open/execute),create from scratch,copy/move or modify no matter for which program they are.
So if you will open a word document it will be scanned,if you'd download a MP3 file from website it will be scanned,if you edit and save some INI file it will be scanned,if you copy/move file from one folder to another it will be scanned.
Basically whatever you'll do with files on your disk they'll be scanned.