I got hit by that one too....
However I figured out I had it within 10 seconds and got rid of it immediately... Lucky for me I guess.
AVG is utter ****, everyone says its great.... but wait.... it doesnt have real time virus scanning, it doesnt have anti-spyware, etc. etc. etc. Buy a proper anti-virus, it doesnt cost much, and because AVG fails to detect half the viruses you have, you will be happier for the fact that you dont have to re-format your computer to get rid of them.
Dont forget the saying, there is no such thing as a free lunch.