remove the avg from the add and remove programs
restart the computer.
reset the internet explorer from the internet tools <options<advanced <reset.
internet will work than again installed the avg free version.
if anything doesnot recover the problem ,computer will not work.
finally restore the computer to its previous date so that all the previous settings back.
kept in mind restore the computer only before the date of the update the avg 8.0 to 8.05
for more information
http://www.iyogi.co.uk