Same issues here. I setup the connection settings for manual proxy settings of localhost and port 12080 as shown in the Avast online guide. I did this for both Firefox and MSIE. As soon as Web Shield is enabled, I have no internet access. I have tried turning Windows firewall off, but it makes no difference. I am behind a NAT router (D-link), but according to Avast, this makes no difference.
The ONLY way I can get access on port 80 (ie: www), it to disable Web Shield. Strange.
:-\