It is as I thought (win98) and the processor is a little underpowered, so the defrag will take up most of the systems resources, so it is important to shutdown non-essential programs (as you though you had) and as Eddy mentioned Safe Mode does this well. You could be able to shut down avast (some of the functions only work with XP) completely using RejZor’s AEC tool.

When you click on the ‘Stop On-Access Protection and Exit,’ the providers are stopped but are still loaded) it doesn’t fully exit (the wording could do with modification) because you wouldn’t be able to use your email program which is setup to interface with avast.

As Vlk mentioned, the program does check for updates when it is set to Ask, perhaps changing the settings to Ask for a time and after a reboot then change it back and see if that changes the setting.

I use dial-up as well and have no problem using the Ask to update setting, you only have to accept it if asked by your firewall (you do have a firewall?).