The problem appears to lie in the 271.1.1/3292 (432/3292) database update, which requires PCs that run the update to restart. Affected PCs will throw up a c0000135 error upon restarting, and fail to boot.
AVG have since pulled the update so no more computers suffer, but if your computer got caught then all is not lost. AVG have released a handy set of instructions to follow, detailing how to disable the software if it bricks your system.
AVG Forum users have also come up with a few tricks to forcing the system to boot, such as pressing F8 and removing the AVG update. All methods will need the Repair CD in order to re-install the software.
AVG Antivirus Breaking Down Windows 7
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