Have you tried running Trend housecall through your system ?
Always worth having a second opinion on a problem.
Trend Micro HouseCall - Start
Also it is worth setting AVG to do a boot time scan and remove from there.
This is a hell of alot faster.
From what I can find seems this is a simple piece of Malware spread via e-mail and ICQ.
So maybe Spybot/Adaware would help with it's removal