Tell me about it Meistergimp!
I was going around in circles after two full clean installs, blaming Creative and SpywareBlaster...
Typical, although at least now we might get a fix, there's at least two of us having the issue on Connect, and a third here being yourself.
I would go back to Avast but I know the beta is out for version 5 so I wouldn't be able to settle for 4.x
I just renamed shellext.dll to shellext.bak, which seems to have done the job, I lose the shell integration but at least it works for now.