I'm not expert at all, but I work at a university in China and we've had this virus going around for some time. Here's what it does on my system.
It gets on a flash drive and there makes your folders hidden. Then it creates .exe files with the same names as your folders, and gives them an icon identical to a folder icon. So when you look at your files, you see some icons that look like folders and that have names that you recognize, but they are not folders - they are executable files. When Avast moves them to the virus vault it does not move or alter your original folders. They are still in their original place - but they are now Hidden.
The virus, as far as i know, does not delete the original folders - it just makes them hidden. In order to see them again you must change the view options. Create a new folder. Open it and go to Tools-Folder Options. Go to View. You'll see an option to "Show hidden files and folders". Select this and then click the button that applies the option to all files and folders. Your original folders should now be visible, but they'll be dimmed, indicating that they are still Hidden. Right-click on each folder icon - don't open it, just right-click. Select Properties and de-select Hidden.
If you are ever in doubt whether a icon is a real folder or an executable file (virus) disguised as a folder, you can right-click and look for the "Explore" option. Folders will have this option, but files - including .exe files - will not have this option.
Let me know if that helps or not.
