windows xp and avg internet security problem

a) Contacting Microsoft will not help you
b) restoring your computer will not help you

The problem is your HDD has been marked "dirty" and you cannot defragment a dirty volume.

Your HDD may have been marked dirty from a power interruption, using the power button, pulling the plug, aborted restart, ungraceful shutdown, etc.

You can query the dirty bit on a volume from the command prompt window.  Here's how:

Click Start, Run and in the box enter:

cmd

Click OK to open the command prompt window.

As an example, to query the dirty bit on drive C, enter this command:

fsutil  dirty  query  C:

Sample output:
Volume C: is dirty
Volume C: is not dirty

Type 'exit' to close the command prompt window.

No amount of entering commands, no amount of registry editing will clear the dirty bit on a volume (sorry Microsoft engaged Support Engineer "experts")

Only a chkdsk with error correction (chkdsk  /r) can clear the dirty bit and it might not work the first time.

To run chkdsk /r, click Start, Run and in the box enter:

chkdsk  /r

Click OK and respond in the affirmative that you want the volume checked on the next reboot (then reboot of course).

This disk checking can take a long time (perhaps several to many hours) depending on the size of the volume, the amount of data on the volume and what the disk checking finds to do.  You may have to run it more than once.

When chkdsk runs automatically on a reboot either because XP thinks it needs to (perhaps your NTFS volume has been marked as dirty) or you chose to do it yourself, the results are shown in the Event Viewer Application log.  You need to look there for the chkdsk log and any problems after chkdsk has run.

To see the Event Viewer logs, click Start, Settings, Control Panel, Administrative Tools, Event Viewer.

A shortcut to Event Viewer is to click Start, Run and in the box enter:

%SystemRoot%\system32\eventvwr.msc

Click OK to launch the Event Viewer.

Look in the Application log for an event sourced by Winlogon, something like:

Event Type:    Information
Event Source:    Winlogon
Event Category:    None
Event ID:    1001
Description:

Checking file system on C:

The type of the file system is NTFS.
A disk check has been scheduled.
Windows will now check the disk.                       
  39070048 KB total disk space.
  25151976 KB in 78653 files.
     48256 KB in 10264 indexes.
         0 KB in bad sectors.
    237080 KB in use by the system.
     65536 KB occupied by the log file.
  13632736 KB available on disk.
Windows has finished checking your disk.


If you see any errors - even errors that are corrected, run chkdsk /r again until you see no errors.  You should have no errors.

Check the dirty bit again.  Rinse and repeat if desired.