Hi,
Your friend should uninstall Norton Antivirus 2004 and Norton Personal Firewall 2003 because it is not supported anymore. No updates is provided by Symantec to unsupported version like NPF 2003 and NAV 2004 unless your friend subscribe for the updates. If she didn't, tell her to remove those products.
After removal, make sure XP Firewall is enabled then try to connect to AVG update servers.
You can also install another firewall like Kerio, Outpost, jetico or ZoneAlarm but I suggest to try to do the above first to find out whether it's a firewall issue or not.
let me first off state that this inst for me this is for a friend of mine who i talk with online. she got back from vacation to find her computer acting up and had someome say it would be $200 to get it fixed... well updated to AdAware Se and that took care of some of the problems but now AVG's acting up...
i use a dialup internet connection so i dont know much about firewalls and how to work around them. AVG wont connect to the update server. i checked the documentation grisoft had for working with firewalls but it didnt list what she had... she's got a compaq S6100nx so it's a decent computer for the most part though it came with norton antivirus 04 and personal firewall 2003. as i understand firewalls it's the personal firewall that's causing the trouble. i'm debating about having her completey scrap norton AV as its' outdated as is, hence wanting to get AVG going on that computer... but that's another topic.
so anyone know how to get AVG to work around that firewall or will i have to have her scrap that one too and get zone alarm? i assume that'd be the prefered/most cost effective choice.
i've had her make sure AVG will work with the XP firewall so that's set up to work according to what i read from grisoft's documentation on firewalls.

Chowhound
Comic Vine
GameFAQs
GameSpot
Giant Bomb
TechRepublic