Use avg remover to uninstall avg then install it after restarting the computer
Install Avast instead.
This problem has been around since the birth of AVG8 and Grisoft have made no attempt to fix it. Their support stinks: report the problem and you will get no solution unless you pay for the full product. AVG8 has been around long enough for them to sort this issue out, but they've chosen not to.
Are you certain that you couldn't just click 'continue' and have it install correctly (despite posting that error)? Which OS were you trying to install in, anyhow? Perhaps you can installed AVG Free or Moon Secure with some success, and be satisfied with that at first?
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you'll most likely need to re install the operating system software
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