Am using latest version (7) of Avast. I cannot find a setting for Virus Chest items’ retention time. Is there one, or do the items remain in the Chest forever or until additional items get dumped into it causing the max storage (which I left at the default 256MB) to be exceeded, whereupon the oldest (?) items are automatically deleted?
There is no setting to do that.
Generally leave them in there for a few weeks, if there has been no adverse effect of the file being in the chest, then scan the file within the chest (right click and select scan). If it is still detected then you can manually delete the file from within the chest (right click and select delete).
I agree, something avast should have
Many other AV have this, you can sett a time for how long the file will stay in quarantine…
Some also scan all items in chest after every update and auto restore FP when fixed or give you a note…
If there is to be such a thing, it would have to have safeguards as mentioned, time frame and scan before removal. If still infected remove, if not, now we get into another issue.
Should the user be notified about a file in the chest no longer considered infected, e.g. original detection an FP or should it restore them automatically and remove the copy in the chest.
Now I hope you can see how this gets complicated, so it isn’t as simple as just removing files in the chest older than ‘X’ days/weeks old.
As everything else in avast, i guess it will be configurable to fit your exact need if they implement this. 
For me I just wonder about the necessity and or the effort required to achieve this as to its worth.
e.g. virus infections shouldn’t be so frequent as to warrant this kind of space saving measure, if they are I would suggest it better to review security practices.
Totally agree with David on this one.
My virus chest usually looks like the picture:
http://my.jetscreenshot.com/2701/m_20130203-hmhf-55kb.jpg
Can’t remember when I’ve actually had something in the virus chest. 