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Ah is it because of the password then ?
Yes, no virus scanner can scan a password protected/encrypted file, as it doesn’t know the password
Is that why you told me to put one on before I emailed it?
Yes, with the password on, no other virus scanner along the way could remove the virus before it got to the avast virus labs.
'7-Zip' (standard compression & deflate method,what ever that is !) and Avast cant scan through it.
I have never tried 7-Zip myself, but i will check it out.
Avast version is 4.5 Home edition.
Today avast 4.6.603 came out, there are alot of extra features, i suggest you update then reboot (the retry any scans you did on 7-Zip files)
p.s I've been a little concered because Avast has never 'picked up' on a Virus while I have been 'surfing' my old AVG used to all the time, just reading one of the new posts on the same subject NONE of my blocked operations under 'blocker' were ticked either (also default) so I have now ticked them all, is this the correct thing to do ?
Well it is fully up to you what ones you tick, avast should ask you in the event that it blocks something like that.
BTW, the new avast 4.6.603 has a webshield which greatly improves malware detection while browsing (it does this by scanning HTTP traffic), if you want to test it, try downloading the eicar test file, you will notice you can’t 
–lee