Hi everyone, Let me start by saying I am a huge fan of Avast! Free, and I recommend it to lots of people and use it personally.
I work at an IT help desk and I have also seen a lot of machines that have Avast on them and have noticed one particular issue that is a common occurrence for problems with Avast.
Frequently, I find that Avast is unable to update itself because a piece of malware is on the system and has changed the IE proxy settings to a malicious proxy server running on the computer itself. Yesterday, I was working on a machine that had this very problem, and avast and hadn't updated it's definitions since July.
Consequently, this machine also had the TDSS rootkit which I removed with other antimalware tools.
On this machine, I simply changed the settings in Avast to have it use a direct connection to the internet to update, immediately it was able to update and help me remove the malware.
This problem in my opinion is due to the default settings in avast, which are to use the settings internet explorer uses to connect to the internet.
What I suggest instead, is for whenever the machine is unable to update, to try both ways. First try updating with whatever it is set up to do (IE settings by default), then if this fails, try with a direct connection. This seems like it would be an easy and effective fix to this common problem. Perhaps have a checkbox that says "Try direct connection if proxy fails", or something like that.