I’ve been using AVG for some time-I switched to it due to the update problem of avast!(see my thread “I have a question”-you know,where avast! says its virus database is up to date than it says that in fact it is not).But AVG Free 2011 doesn’t work well with any standalone firewall so I’m tempted to switch back to avast!,which is much more versatile than AVG.
Thus this is my question:is reinstalling avast! a solution to that update problem?
You should give the latest RC version 6.0.1035.
Give it a run. 
Check out the fixes
http://forum.avast.com/index.php?topic=74149.0
Edit: Making sure there are no remnants left of previous anti-virus software, and the proper removal tool(venders)used is extremely important before attempting to install Avast.
AVG Remover can be downloaded here: http://www.avg.com/download-tools
Then I suggest an installation from scratch (the 6.0.1035 posted before is quite stable):
- Download the latest version of avast! Uninstall Utility and save it.
- Download the latest avast! version and save it.
- Uninstall avast from Control Panel (if possible). If, for any reason, you can’t run it, try booting in Safe Mode and doing it from there. Anyway, boot after that.
- Run the avast! Uninstall Utility saved on 1. If, for any reason, you can’t run it, try booting in Safe Mode and doing it from there. Anyway, boot after you’ve run it.
- Install avast! using the setup saved on 2. Boot.
- Register your free copy or add the license key for Pro.
- Check and post the results. If, for any reason, you did not solve, try doing the step 3 in Safe Mode anyway.