run IE7 in "No Add-Ons" mode while Avast! is installed? It's only to troubleshoot if the problem is any add-on in IE7.

If IE7 safe mode (no add-on mode) will run properly with Avast! running, you might need to reset IE7.

Please see method 3 in http://support.microsoft.com/kb/936213/

If IE7 in no add-on mode will continue to hang with Avast running, you might need to adjust avast settings e.g. temporary disable web guard? Give it a try.

Also, what other security software do you use when you installed Avast? Maybe there's a conflicting application e.g. third party firewall