Like I suspect, the behavior (conflit) is worse (or only occur) in Windows XP.
In Windows 98 is everything ok.
But, AVG 7 or AVG 6 (free). With AVG 6 the conflict in XP is well known.
Even the gurus of avast said that avast does not conflict with AVG 7 in a XP, but for me, maybe for other reasons, AVG 7 get me into hot water 
My suggestion: I used AVG in the past. Change to avast! 8)