Looks like AVG screwed up pretty badly with one of their latest updates:
System crash after the recent AVG 2011 update 3292 (BSOD)
If you are unable to boot to your operating system after the recent AVG 2011 update 3292, it is necessary to perform the following steps to solve the situation:
* Download the modified version of AVG Rescue CD designed to fix this particular problem.
* Extract the downloaded archive and run the setup.exe file. As a destination please select a letter corresponding to an empty USB disk.
* After the installation is finished, boot the affected computer from the created USB disk. (This can be usually done by repeatedly pressing the F12 key until the boot menu appears. If the F12 key does not work or you are unable to select to boot from the USB disk, please see your mainboard´s manual or contact the manufacturer of the computer).
* Wait until the AVG Rescue CD begins to boot up (this will be done automatically after 6 seconds or by selecting the first option in main menu).
* When prompted, press any key to automatically fix the situation.
* Then please press Enter to reboot your PC.
After booting to your operating system, repair the AVG installation as described in FAQ 3251 if your AVG is in error state.