AVG sometimes causes inability to launch any applications

Operating System: Windows XP Home

I have AVG 7.5 Anti-Virus and AVG Anti-Spyware Free Editions. I don't have any other anti-virus software installed. And in my start-up I have Java and Logitech QuickCam webcam.

On start-up most of the time AVG icon appears in the tray in the lower right corner and everything is fine.

But sometimes AVG icon does not appear in the tray in the lower right corner even if you wait a long time. And every time this happens I can't launch any applications - when I double-click on any desktop icon (including AVG) the cursor turns into hourglass for 30 sec or so and nothing happens.

Then I go into Task Manager and check the cpu and memory usage - everything is fine, then I go into applications - nothing shows - then into processes - aha, several avg processes are running - try to kill them - they are not dying - no effect whatsoever.

The Restart command is also not working : either from Task Manager or from the menu Start-> Shutdown-> Restart - just nothing happens. So I have to press the reset button to restart the computer. Then scandisc comes up, it does not find anything, then Windows starts and AVG icon appears in the tray and everything is OK.