Download TrojanHunter or The Cleaner from:
Both offer 30 days trial.
See if any will get rid of the trojan.
That dll file is MultiMedia Kernel support Driver but it should be located in system32 folder instead of root directory of Windows.
You can also try to scan using freeware SUPERAntispyware from http://www.superantispyware.com
If AVG cannot handle it properly, it could be because there is a processes running behind which means it is in use. Have you tried to scan with AVG in safe mode?
AVG resident shield recently began telling me c:/mmdrv.dll is a threat called Trojan horse "PSW.Generic5.SFG" and i have the option of moving it to the virus vault or healing or ignoring. I've tried all 3 options, but every time i click one of the other solutions literally 2minutes later the same threat pops up again and again. its very annoying. I've tried ccleaner, stinger, ewido, avg scan, spyware, adaware, bakooza, and registry mechanic in windows safe mode to fix this, but the problem still persists. The message has popped up 3 times since posting this message. Any clues?
I am on windows vista.