F0dder: Yes but if he manually ran something then the virus scanner's on-access protection should have kicked in and caught it! I think it seems avast has indeed missed that one or it fell outside the scope of the free product.
Icekin: Glad you were ok clearing it all though.
To go back to the indirect question in the thread, as we are all software junkies anyway:
You might not get the same level of smooth packaged protection from free products, but you can build a very secure PC with free products - you just need 5+ layers of them:
A free virus scanner, I tend to recommend avira for people who can put up with its slightly "techie" feel and not be intimidated. But avg, avast and a few others all give a good protection against viruses, normally! The difference between free virus scanners and commercial ones is typically not the virus protection but all the other things you get around it: additional layers of protections (spyware, trojans etc.), easier interface etc.
On some of my pcs I use bitdefender, the commercial version but this is newly available in a light free version. Not sure how it compares but I suspect the definitions are in sync with the commercial product. On my mom and some friend's pcs I use avast or avira.
A free firewall - I am not up to date on these at all
Another layer of protection is to have something like winpatrol (or any similar "changes" watcher) to watch for suspicious changes in IE configuration, or the registry etc. I use winpatrol (free) and regrun (not free) on different PCs and might buy WP pro just to support it.
Another layer are the trojan and spyware tools - I use boclean, SpywareGuard, SpywareBlaster. They are simple and quite unobtrusive.
And a good backup/image tool, as sometimes it is easier to roll back than try to clean.
Theres a lot more sophisticated stuff available for free, my head buzzes everytime i go to wilder's security forums, i cant keep up with that field anymore! You have application walls and registry guards, spyware scanning tools and resident sniffers and virtual sandboxes...
I stick with less intensive methose as I have a rather conservative behaviour and dont think I need that many layers.