The error relates to AVG crapware which you either have or had installed. This is not recommended by anyone and is best uninstalled and replaced with Microsoft Security Essentials
with the Windows 7 Firewall kept updated Automatically.
If this was installed recently you may be able to System Restore from the DVD or Repair CD System Recovery Options
to before it's install to get it Started. If not I would manually try restoring as far back as you can to try to start it.
Then if necessary continue with the other Troubleshooting steps from the top. What were the results of the AV scans? The AVG error could relate to its corruption by infection. You must complete every step to be assured you've done everything possible to start Windows 7 before giving up to rescue your files and run Recovery or Clean Reinstall.