This weekend users' found their AVG software updated with a new virus definition file. Then they quickly found their computers crashing.
What was discovered was that the new virus definition file mistook user32.dll, a critical Windows component, for a container for the Trojan Horses PSW.Banker4.APSA or Generic9TBN. When the scanner went active, it deleted this critical file, thinking it contained a virus, causing the system to crash. AVG recommended users whose definitions auto-updated delete their virus definition file and cancel any scans they have running.
If your computer is affected, it will either stop booting or go into an endless reboot loop. Vista users can breathe a sigh of relief -- so far that OS has remained relatively unaffected. Windows XP users, however must now exercise extreme caution, or risk having to carry out a bothersome repair process.
source - DailyTech - Update: AVG Virus Scanner Accidentally Removes Critical Windows Component