Similar problem here with XP SP3 partially freezing with Avast 7.0.1426 (previous version 6 worked OK):
1. First, had updated online to V7.0.1426, and it worked OK in the Primary User Account, but upon rebooting to the Limited account I found that Firefox would not open at all (but other browsers would), and some (but not all) other applications would open but then freeze (eg: CCleaner/installed, SumatraPDF/installed, and PDF-XChange/portable). When attempts were made to close a non-running program, it could not be closed either directly or via the Task Manager, and furthermore the XP operating system itself had froze and could not be shut down via the desktop's START button - it required a hard reboot (power off/on).
2. Completely removed Avast with uninstaller aswclear.exe, rebooted, and all apps ran OK in both the Primary and Limited user accounts.
3. Made a clean Avast re-install with downloaded V7.0.1426. Applications ran OK in the Primary account.
4. Rebooted to the Limited account, and at first all the above apps seemed to work OK. Breathed a sigh of relief, and to verify I again rebooted to the Limited Account.... BUT, dammit, then again the above apps would freeze, could not be closed, and XP could not be shut down except via a hard reboot.
5. Next, I went to Avast's User Interface and excluded the above apps, rebooted to the Limited account, and re-tried the apps - the problem was unchanged.
6. Went again to the Avast User Interface, deleted the exclusions, turned off the Real-Time File System Shield, and rebooted to the Limited Account....now all the above apps work OK; however, the Avast icon in the System Tray has a caution sign indicating lack of full protection.
Any suggestions? As Avast says the File System Shield is the most important, it would seem that this anti-virus program is useful only in a XP Primary User Account and not a Limited account, which is the most used.