Please follow the instructions below and let me know the results.
To start System Restore using the Command prompt, follow these steps:
1.Restart your computer, and then press and hold F8 during the initial startup to start your computer in safe mode with a Command prompt.
2.Use the arrow keys to select the Safe mode with a Command prompt option.
3.If you are prompted to select an operating system, use the arrow keys to select the appropriate operating system for your computer, and then press ENTER.
4.Log on as an administrator or with an account that has administrator credentials.
5.At the command prompt, type %systemroot%\system32\restore\rstrui.exe , and then press ENTER.
6.Follow the instructions that appear on the screen to restore your computer to a functional state.
Since you have an old version of avast ( latest stable is 6.0.1289 ) why not uninstall it then try your restore, at least it will eliminate the probability of Avast being the cause of your restore function not working.
Download and save http://files.avast.com/iavs5x/setup_av_free.exe to an external drive-thumb drive the latest version of avast first for you to re-install after your restore.