system
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Yes, and no. Since a downloader cannot download anything without an internet connection it’s not that, but ms_update_069_7723.exe can still have been responsible for the regeneration of the malware avast! did detect. In either case it seems beyond coincidence to me that the alerts stopped immediately after deletion of that file. As long as you followed the path indicated in the shortcut’s Target field and deleted that file, rather than just the shortcut itself, I do believe you’ve taken the correct action. But since we all agree that confirmation is needed I’ll again suggest a Trend Micro on-line scan. And I still think you should clear your temp files since this is where the detections were located.
Since avast! never did alert on ms_update_069_7723.exe I don’t think we should expect to see it in the log, but the copy you saved can be upload it to Jotti and Virus Total for additional opinions
http://virusscan.jotti.org/
http://www.virustotal.com/en/indexf.html
You could also send a copy to avast! as DavidR suggested earlier in this thread.